Got this in my mail box today - Interesting! The Author is highly respected in the Economic circles. Why is the Finance Ministry hiding taxpayer data from us? By R Vaidyanathan, Professor IIM Bangalore Our Finance Minister told us in his last budget speech that there were only 42,800 people assessed to tax for incomes of more than Rs 1 crore. This is out of 3.1 crore assesses. There was a hue and cry and many observers commented about the need to increase tax coverage. However, what is interesting is the fact that the Ministry has actually ended up hiding this data from the public. Till 2000, we used to get category-wise details from the All India Income Tax Statistics (AIITS). This publication has been discontinued. In other words, the finance ministry has become shy of providing details of tax assessed, etc. Apparently, in 2000 there were no salaried persons in the country with incomes of more than Rs 1 crore annually. In all, there were around 250 persons with salaries above Rs 25 lakh. In the case of the self-employed, the number was around 900, with none in the Rs 50-100 lakh category. Does this mean there were no film stars, cricketers, chartered accountants, company directors, or top managers - that is, salaried and non-salaried persons - in 2000 earning in the Rs 25-100 lakh range? These folks must have been in some financial distress, enough to float relief funds for them, given that they ought to have been among the richest Indians outside business owners even then. In 1998, the IT Dept had provided the number of returns filed by some categories of services. The numbers speak volumes about the coverage and also the nature of underlying collections. The whole country, it seems, had only 10,539 utensil shops and 5,477 furniture shops in taxable categories in 1998. Even these details are now being hidden for reasons unknown. Instead of details, what we get now is aggregated numbers, and that too is based on questions asked by some members of Parliament. We have the information available from the IT department about assessees in different categories. It reveals that there were 3.1 crore assesses in 2010-11 but it does not tell us the amount of tax collected from different categories. Another important aspect is the tax exemption on dividend incomes. There are owner shareholders who may be getting more than Rs 100 crore as dividends annually by virtue of their holdings. We do not know how much dividend was distributed and how much rich individuals benefited. For instance, the Reserve Bank of India (RBI) says that 3,041 selected public limited companies paid out Rs 50,145 crore in dividends in 2010-11. In another 1,741 private limited companies, Rs 1,423 crore was paid as dividends. This implies that at least Rs 51,500 crore was not taxed by government at the 30 percent rate applicable to individuals in the top brackets -viz the Govt LOST Rs 17,000 crore in taxes. Of course, financial wizards and accountants will argue that companies are paying dividend distribution tax, but this tax is levied at half the rate paid by the top bracket.
Posted on: Sun, 17 Nov 2013 01:34:14 +0000
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