‘Super rich’ incomes’ share ebbing amid middle-class mobility: CBDT
- October 27, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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‘Super rich’ incomes’ share ebbing amid middle-class mobility: CBDT
Subject: Economy
Section: National Income
Context:
- The Central Board of Direct Taxes (CBDT) released statements on income tax statistics and income inequality in India.
Details:
- India’s tax base has widened sharply since 2013-14, with individuals moving up the income ladder and the proportion of super-rich taxpayers’ incomes declining.
- As many as 7.41 crore I-T returns have been filed so far this year, which include 53 lakh first-time tax filers.
- The overall number of income tax (I-T) returns filed by individuals has risen from 3.36 crore to 6.37 crore through assessment years 2013-14 to 2021-22.
Migration to higher range:
- There is also an increase in the number of returns filed by individual taxpayers across various ranges of gross total income.
- In the range of gross total income up to ₹5 lakh, the number of returns filed by individual taxpayers has increased from 2.62 crore in AY 2013-14 to 3.47 crore in AY 2021-22, registering an increase of 32%.
- This range of income includes individuals having income below taxable limit who may not be filing returns.
- For higher income ranges of ₹5 lakh to ₹10 lakh, and ₹10 lakh to ₹25 lakh, the number of individual returns filed surged 295% and 291% individuals over the same period, respectively.
- This indicates that individual taxpayers are showing a positive trend of migration to a higher range of gross total income.
Increase in income of individual:
- The average gross total income for individual taxpayers increased from about ₹4.5 lakh to about ₹7 lakh over the nine-year period, representing an increase of 56%.
- The increase in average gross total income for top 1% individual taxpayers is 42% while that for bottom 25% individual taxpayers is 58%.
- The increase in net direct tax collections has increased from ₹6.38 lakh crore in 2013-14 to ₹16.61 lakh crore in 2022-23.
Decreasing income inequality:
- The proportionate contribution of gross total income of top 1% individual taxpayers vis-à-vis all individual taxpayers has decreased from 15.9% to 14.6%, while the share of the bottom 25% taxpayers increased from 8.3% to 8.4% over the same period.
- The proportion of gross total income of the middle 74% group of individual taxpayers increased from 75.8% to 77% in the above period.
CBDT:
- Under the Ministry of Finance
- It is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also function as a Division of the Ministry dealing with matters relating to levy and collection of direct taxes.
- The Board was split up into two, namely the Central Board of Direct Taxes and Central Board of Excise and Customs with effect from 1.1.1964.
- It consists of a Chairman and six Members.
Source: TH