Do it yourself

It is an annual ritual to seek tax relief, exemptions and incentives from the finance minister before presentation of the annual budget. The expectations of tax favors are particularly stronger in election years, as taxpayers and market participants are led by the belief that the government may be gratuitous to allure voters. There is however no empirical evidence of any correlation between the direct tax regime and government populism. The fact is that the population that is materially affected by direct tax laws is not significant to the election outcome. The recently released Direct Tax Statistics by the Central Board of Direct Taxes (CBDT) shows that income taxpayers in India may not be a group of interest from a general election view point. For example, consider the following points evident from the said statistics: No. of taxpayers: In AY23 only 8.91crore individuals paid some income tax (including TDS) in India. This is less than 10% of the total eligible voters in India. T...

 R ecently, the Central Board of Direct Taxes (CBDT) released the latest data on direct collection in India. The data highlights some interesting trends in direct tax payments in India. In particular, the following points are noteworthy: Personal taxes growing faster than corporate taxes The growth in personal income tax has been far higher relative to corporate tax collections. In FY12 personal tax collection amounted to 53% of corporate taxes. The proportion of personal tax relative to corporate taxes. Top 5 states contribute 3/4 th  of total tax collection Top five states contributed about 73% of the total tax collection in FY22. Out of these the top 3 states (Maharashtra, Delhi and Karnataka) contributed over 61% of the total tax collection in FY22. Though separate city wise data is not available, the anecdotal evidence suggests that the top 3 cities (Mumbai, Delhi and Bengaluru) may be contributing over 30% of the total tax collections. This highlights the massive regiona...