Personal income tax to GDP ratio rises to 2.94% in FY22

New Delhi: Personal income tax as a percentage of GDP has gone up from 2.11 percent in the 2014-15 to 2.94 percent in the 2021-22 fiscal, indicating that the taxpayer base is widening as a result of the steps taken by the present government led by Prime Minister Narendra Modi. At a review meeting with the Central Board of Direct Taxes (CBDT), finance minister Nirmala Sitharaman was apprised about the impact of various steps taken by the apex direct tax body to widen the taxpayer base, the finance ministry said.

PIT to GDP ratio has increased from 2.11 in FY2014-15 to 2.94 in FY 2021-22

The ministry said that the Personal Income Tax (PIT), which is paid by individuals to GDP ratio has been steadily increasing from 2.11 in FY 2014-15 to 2.94 in FY 2021-22. The personal income tax collection (including Securities Transaction Tax) increased to over Rs 6.96 lakh crore, from over Rs 2.65 lakh crore in 2014-15.

'Intro of new data sources in SFT has led to 1,118% increase in reported information'

The introduction of new data sources in Statement of Financial Transactions (SFT) like dividends and interest, securities, mutual funds, and information from GSTN in recent years has led to 1,118 percent increase in reported information. This has resulted in the addition of information of about three crore persons, a finance ministry statement said.

Intro of new TDS codes led to increase in reported transactions

The introduction of new tax deducted at source (TDS) codes, which have almost doubled from 36 to 65 in the last eight years, led to an increase in total reported transactions in FY 2021-22 to 144 crore as compared to the number of reported transactions in FY 2015-16 of 70 crore. This has resulted in a doubling of the number of unique transactions from 4.8 crore (in 2015-16) to 9.2 crore (in 2021-22).

Review meeting held for discussing multiple pointers

During the meeting, which was attended by Revenue Secretary Sanjay Malhotra, CBDT Chairman Nitin Gupta, and all members of the CBDT, efforts for increasing the taxpayer base, pending disciplinary proceeding cases, disposal of applications for condonation of delay, and grant of exemptions under certain sections of the Income Tax Act, 1961, were reviewed.

CBDT should take timely actions on all applications filed by taxpayers: FM

The finance minister emphasised that CBDT should ensure taking timely and appropriate actions on all applications filed by taxpayers and desired a reasonable time frame for the disposal of such applications. She also exhorted CBDT to expand and strengthen its efforts to increase taxpayers' awareness regarding the provisions of the direct tax laws and compliance, the ministry said.

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