Post-note ban data will be used to widen tax net: Jaitley

New Delhi, Feb 1 (IANS) Finance Minister Arun Jaitley on Wednesday said that India was largely a tax non-compliant society as the direct tax collections were not commensurate with the pattern of India's income and consumption, and added that the data received post-demonetisation will be used for expanding the tax net.

"India's tax to GDP ratio is very low. Data indicates that our direct tax collection is not commensurate with the income and consumption pattern of Indian economy. We are largely a tax non-compliant society," Jaitley said while presenting the Union Budget 2017-18 in the Lok Sabha.

"After the demonetisation, the preliminary analysis of data received in respect of deposits made by people in old currency presents a revealing picture. This data mining will help us immensely in expanding the tax net as well as increasing the revenues," he added.

Jaitley said the government was committed to make the tax rates reasonable, tax administration fairer and tax base wider.

He brought to the notice that the advance tax for personal income in the last three quarters of 2016-17 had shown a historic growth of 34.8 per cent.

Revealing the demonetisation data, he said that during the period November 8 to December 30, 2016, deposits between Rs 2 lakh and Rs 80 lakh were made in about 1.09 crore accounts with an average deposit size of Rs 5.03 lakh.

Deposits of above Rs 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs 3.31 crore, he said.

The Finance Minister said that the direct tax collections are not commensurate with the consumption and income data.

Among the 3.7 crore individuals who filed tax returns in 2015-16, 99 lakh show income below the exemption limit of Rs 2.5 lakh per annum, 1.95 crore show income between Rs 2.5 to Rs 5 lakh, 52 lakh show income between Rs 5 to Rs 10 lakh and only 24 lakh people show income above Rs 10 lakh.

Of the 76 lakh individual assesses who declared income above Rs 5 lakh, 56 lakh are in the salaried class. The number of people showing income more than Rs 50 lakh in the entire country is only 1.72 lakh.

"We can contrast this with the fact that in the last five years, more than 1.25 crore cars have been sold, and number of Indian citizens who flew abroad, either for business or tourism, is 2 crore in the year 2015," he said.

"The predominance of cash in the economy makes it possible for the people to evade their taxes. When too many people evade taxes, the burden of their share falls on those who are honest and compliant," he added.

(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)