Mumbai, July 5: Union finance minister Arun Jaitley today said the implementation of goods and services tax (GST) along with other measures taken by the government after demonetisation will have a positive impact on direct tax collection.
The withdrawal of Rs 500 and Rs 1,000 notes announced by the Prime Minister last year had resulted in 92 lakh more people filing their income tax returns. This was over and above the 3.34 crore individuals who had filed their returns before November 8.
Moreover, the total number of registered individuals or entities with regard to indirect taxes stands at 80 lakh.
“Those involved in trade and manufacturing, the volume of their businesses will now be quite apparent and this will have an impact as far as direct taxes are concerned,” Jaitley said while replying to SBI chairperson Arundhati Bhattacharya at the bank’s conclave here today.
The finance minister revealed that before demonetisation, only 3.34 crore individuals were filing their income tax returns and of these, 95 lakh were filing returns but not taxes, thus coming under exempted limits.
However, of the balance 2.35 crore people, the number of individuals who declared income beyond Rs 5 lakh were only 78 lakh and of this 78 lakh, 61 lakh were salaried individuals. This meant that professionals such as lawyers, doctors, engineers, businessesmen and traders made up for the remaining 17 lakh.
Jaitley expects the tax base to improve with GST as more people will declare their income. According to the finance minister, some sections were opposed to GST as their volumes of business will now be known, necessitating the filing of tax returns.
Jaitley remarks come at a time the implementation of the crucial tax reform has been smoother than anticipated.
“I do feel that with GST and demonetisation…the combination of these two, India’s tax base and, hopefully, tax-to-GDP ratio will improve over time,” he said.
Jaitley said the government will now focus on the implementation of reforms taken in the past, besides looking to cleanse the system of political funding.
Source : https://www.telegraphindia.com/1170706/jsp/business/story_160370.jsp