The Income Tax Administration said tax receipts on corporate income rose 34 percent in the first four months of the current fiscal year, suggesting a simpler tax regime with lower rates is yielding results.
The Tax Department tweeted about the April-July increase in corporate tax receipts, an apparent attempt to criticize the 2019 cut in corporate tax rates that was said to have been hit by tax receipts from the Center for Welfare Systems. She was accused of influencing her spending.
The tax department said the corporate income tax collection for fiscal year 2021-22 (April 2021 to March 2022) was Rs 7.23 lakh crore, which was 58 per cent higher than the collection in the previous fiscal year.
“Corporate tax collection in FY2022-23 (ended July 31, 2022) shows strong growth of 34 percent compared to corporate tax collection in the same period of FY2021-22,” it said, without providing an absolute number. . Collection.
Tax collection is one of the indicators of economic activity, as higher corporate incomes indicate increased demand and wealth accumulation.
The department said corporate tax collection in 2021-22 was more than 9 percent higher than collection in the pre-COVID 2018-19 tax year.
“The positive growth trend is continuing (in the current fiscal year), barring the overall impact of the COVID-19 pandemic in fiscal year 2020-21, when corporate tax collections were temporarily impacted,” it said. “This shows that the simplified tax regime, with lower rates and no exceptions, has delivered on its promise.”
In September 2019, the government gave companies the opportunity to switch from a 30 percent lower base rate to 22 percent and to waive all exceptions.
This resulted in a 16 per cent drop in corporate tax revenue to 5.57 lakhcrore in 2019-20. But the drop was about Rs 1 crore, not Rs 1.45 crore as feared at the time.
Tax collection in 2020-21 was affected due to the pandemic.
While the ruling BJP and Prime Minister Narendra Modi have launched a massive campaign against freebies like free electricity and water, which they say are bankrupting a state, the Aam Aadmi Party (AAP) has launched a counterattack. The ruling government has been accused of giving donations to companies in the form of reduced taxes and debt relief.
The heated debate about freebies takes place ahead of elections in states like Gujarat. AAP wants to challenge the state’s ruling BJP with its Delhi development model, in which electricity and water consumption are free up to a certain level. The BJP seems opposed to campaign promises made without considering a state’s financial situation.