About 70% taxpayers may shift to new regime: CBDT chairman
New Delhi, Oct 10, 2023
About 70% of personal income taxpayers are expected to shift to the new tax regime, which has been sweetened in the FY24 union budget, Central Board of Direct Taxes (CBDT) chairman Nitin Gupta said on Tuesday, adding that around 60% of corporate income is already under the low tax rate regime.
Talking to reporters, Gupta said direct tax collections stood at ₹9.57 trillion after refunds in the current financial year, as of 9 October. This was 21.8% higher than the net collections made in the same time a year ago.
Prior to refunds, the tax authority collected ₹11.07 trillion so far this year, nearly 18% more than what was collected at the same time a year ago. Multiple factors including the use of technology and sharing information about the taxpayers’ transactions reported by various entities, with him in the annual information statement are helping in tax collection growth, the official said. Around 5.3 million new taxpayers have filed tax return by July this year.
Gupta said that India has collected ₹600 crore so far this year as tax deducted at source (TDS) from the net winnings issued by online gaming platforms to players. The union budget had widened the scope of TDS on net winnings from online games this year. TDS as a mode of tax collection has been becoming more important as the tax authority widens its oversight of economic activities.
Gupta said that about 60-70% of the individual taxpayers will likely shift to the new personal income tax regime which is a beneficial provision. Even if one’s tax is deducted as per the new regime by the employer, the taxpayer can choose between the old and the new regime at the time of filing the returns, said Gupta. The chairman said that corporations are using the new regime introduced for them in 2019 with lower tax rates and without tax exemptions.
“The last data I had was that there was shift to the extent of 60% of (corporate) profits to the new tax regime in FY23. That is reflected in our corporate tax collection," Gupta said.
Gupta said India is also working with G20 nations for automatic exchange of data on undisclosed overseas real estate assets held by residents of these nations as the current arrangements are more focused on sharing of financial data. Investigations on many cases of undisclosed overseas assets are progressing, the Chairman said when asked about the department’s action on information that has come out in leaks such as Panama papers and paradise papers.
As of 9 October, after refunds, central government’s net direct tax collections stood at ₹9.57 trillion, a 21.8% improvement over the net collections in the same time a year ago. Net receipts from corporate and personal income taxes account for more than half of the total budget estimates of ₹18.2 trillion for this fiscal.
In the current assessment year ending next March, 72.7 million income tax returns have already been filed, most of which have been verified and more than 95% of the verified returns have been processed, as per information available from the tax authority.
CBDT said in the statement that gross corporate tax receipts have grown 7.3% so far this fiscal, while personal income tax collections had grown 29.5% excluding securities transaction tax (STT) receipts. After accounting for refunds, corporate tax collection grew 12.39% while personal income tax receipt grew 32.5% excluding STT. The department has given ₹1.50 trillion in tax refunds so far this year.
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