More companies in tax net as Govt trebles mop-up in 5 years
The 'Statement of revenue foregone' that accompanies annual Budget documents shows that the Government managed this by getting many more companies into the tax net. It also extracted a larger pound of flesh from all of them.
JUMP IN TAX-PAYERS
About 3.1 lakh companies filed returns with the Income-Tax Department five years ago. Today that number is 5.1 lakh. That is a 65 per cent addition to the list of corporate tax-payers.
Even as more companies paid tax, the proportion of profit that companies parted with too rose.
Companies paid out as much as 24.1 per cent of their aggregate profits as corporate tax in the financial year 2010-11. The number is significantly higher than the 19 per cent they paid five years ago. The statutory tax rate has remained unchanged at about 33 per cent over this period.
WHO PAID MORE
The total tax paid by companies to the Government has trebled from Rs 79,000 crore in 2006-07 to Rs 2.3 lakh crore in 2010-11. The documents also show that the Government has been quite successful in identifying and targeting those sections of corporate India which were getting away with tax concessions.
The sugar industry, for instance, enjoyed a tax incidence as low as three per cent four years ago. By 2010-11, it was paying corporate tax at 26.2 per cent.
Software developers shelled out only 12 per cent of their profits as tax four years ago. In the latest financial year, they paid out 19 per cent. Ditto for IT-enabled services and BPOs, which now pay close to 21 per cent -- up from 15 per cent.
Measures such as the phase-out of tax benefits to companies situated in software technology parks and export-oriented units have led to gains for the exchequer. The 'revenue foregone' from the software technology park deduction has fallen from Rs 10,600 crore in 2007-08 to Rs 7,800 crore in the latest fiscal.
Higher rates of Minimum Alternate Tax (MAT), a provision that requires all companies to pay a minimum tax on their book profits, have also lifted collections. The MAT rate has been steadily raised from 10 per cent to 18.5 per cent in five years.
Watch the footage of the Indian Union Budget 2013-14 presented by Finance Minister P Chidambaram on February 28.
Date 28-02-13, Duration 1:45:24, Views 142
RBI Chief Raghuram Rajan stated that more economic data is needed to be confident that economic growth is picking up, although he added that the benefits to exports from the Rupee's fall is yet to kick in.
Date 22 hrs ago, Duration 2:19, Views 31