Key Points
Revenue Secretary Sanjay Malhotra attributed improved compliance as well as the progressive income tax rates as the two main reasons why personal income tax collections have exceeded those of corporate income tax in recent years...
While there are four reasons as such for this trend, the two major reasons are improving compliance and the progressive rates of income tax, the revenue secretary told BT in an interview...
While tax compliance and efficiencies have improved, there are also taxes such as those on dividend that are now levied on the shareholder than in the hands of the company, he noted..
So because the tax rates are progressive, I think this is the single [biggest] reason why personal income taxes are growing faster than corporate taxes, he said, noting that an increase of 10% of corporate income will yield a 10% increase in corporate tax but an increase of 10% personal income can lead to an increase of more than 10% in the personal income tax...
Till July 11 this year, gross personal income tax collections amounted to Rs 3.61 lakh crore (excluding STT and other taxes), while the gross mop up from corporate tax was Rs 2.65 lakh crore..
