Tax collection in India: While India isn’t the richest nation in the world, the tax collection is one of the highest and the revenue tax charge must be decreased to 25 per cent from round 40 per cent at current, eminent economist Surjit Bhalla mentioned.
While chatting with media, Bhalla mentioned discount in tax charge is required to speed up the tempo of financial development.
“We are a much more globalised economy in the world and the world is a lot more globalised. If you look at the overall tax rate structure in India, collection of taxes is one of the highest in the world and we are not the richest economy of the world,” Bhalla mentioned.
He mentioned that tax collection by state, Centre and native our bodies is round 19 per cent of India’s GDP.
“We should move towards reducing it by 2 percentage points. As far as direct taxes are concerned, I think the overall tax rate should not be more than 25 per cent. Right now it is close to 40 with surcharges etc.25 per cent, which is our corporate tax rate, that’s what our income tax rate should be,” Bhalla mentioned.
Currently, the highest revenue tax charge in India stands at 39 per cent. The Budget 2023-24 had lowered India’s highest charge of revenue tax from 42.74 per cent, by decreasing the surcharge relevant on excessive net-worth people.
Bhalla mentioned that taxes want to come back down for all and never simply profit a choose part of the society. India’s gross direct tax collection throughout the final fiscal ended March 2023 grew over 20 per cent to Rs 19.68 lakh crore. This contains gross company tax collection development of 16.91 per cent at over Rs 10.04 lakh crore. Gross private I-T collection jumped 24.23 per cent to over Rs 9.60 lakh crore.
Bhalla mentioned direct tax is one of the areas the place there’s a lot of bureaucratic involvement and it must be much more streamlined to minimise tax evasion.
“You cannot minimise tax evasion without doing something about very very high rates of income taxation. We need to change the tax structure so that everyone benefits rather than some selected sectors,” he mentioned.
(With PTI inputs)
