Contrary to their narratives established on various social and micro-blogging platforms that the Narendra Modi led government hastily reduced corporate tax which had no benefits for the Indian economy and personal tax overtook corporate tax Well, this move was not just a flash in the pan; It was a clarion call to stoke the fire of investment in the manufacturing sector, the cornerstone of the Modi government's 'Make-in-India' campaign.
New companies eyeing manufacturing after October 1, 2019, were given a golden ticket – a chance to pay income tax at just 15 per cent, provided they avoid exemptions and complete their preparations by March 31, 2023, which is That there is a time limit. With whispers of extension through 2024.
Stock market bulls condemned the audacious move. On the day of the announcement, the Sensex jumped 5.3 percent, its most significant one-day rally in a decade, and was headed for a 3 percent rise when the market opened next Monday. Continued.In September 2019, the Modi government reduced the base corporate tax from a hefty 30 per cent to 22 per cent, thereby bypassing the usual budgetary beats and setting the stage for a streamlined tax regime. The move was nothing short of tying the Gordian knot, exposing the entire mess of taxes in which businesses were entangled.
The Congress and the Indian coalition, perhaps unaware of their own narratives, were oblivious to the fact that this pivot from the norm was designed to grease the wheels of commerce and it was the corporate giants who first imposed taxes under the United Progressive Alliance. Enjoyed the discount. (UPA) while the common taxpayer now got benefits under the Modi administration. Later this move reached its organic outcome; The 2019 corporate tax cuts unleashed a trifecta of benefits; Indian corporate tax rates have now stood at par with global competitors, and the low tax rate has trimmed the fat from required rates of return, incentivizing companies to invest more, and the truncated tax rate The cash reserves of the firms have increased, which has marked a new beginning.A flurry of capital expenditure.
The immediate results of the tax cuts were overshadowed by the global upheaval of the Covid pandemic. Yet, hindsight paints a clearer picture as analysts agree that this fiscal shrewdness has tarnished the shine of the Indian economy. This is evidenced by the increase in foreign direct investment (FDI) by US$ 36 billion in 2013-14 and the highest ever annual FDI inflow of US$ 85 billion in the financial year 2021-22.
As the Modi government moved towards fiscal consolidation in 2019, the data paints a rosy picture of the Indian economy.Personal income tax collections with Securities Transaction Tax (STT) increased to Rs 12.01 lakh crore for the financial year 2023-24, showing a huge growth of 24.26 per cent. Net personal income tax collection including ST increased by 25.23 per cent to Rs 10.44 lakh crore.
A huge increase was also seen in tax refunds, which increased by 22.74 percent to Rs. 3.7 lakh crore, a clear indication that the tax coffers were full. The tax collection figures were evidence of the fast pace of the Indian economy. The interim budget revealed a strong 17.70 per cent year-on-year jump in net direct tax collections, reaching Rs 19.58 lakh crore for the financial year 2023-24, up from Rs 16.64 lakh crore in the previous year.Before any refund adjustments, gross direct tax collections for the financial year were a commendable Rs 23.37 lakh crore, up 18.48 per cent from last year's Rs 19.72 lakh crore. Corporate tax collections also grew well, with gross revenue at Rs 11.32 lakh crore. Reached, which is 13.06 percent more than last year. Net corporate tax collection witnessed a growth of 10.26 per cent at Rs 9.11 lakh crore. The initial budgetary forecast for direct tax revenue was pegged at Rs 18.23 lakh crore, which was later revised to Rs 19.45 lakh crore.
The provisional figures are higher than both the original and revised estimates by 7.4 per cent and 0.67 per cent respectively.The story of income tax collection in India is one of prosperity and compliance; The recent surge in collections is more than just numbers – it is a reflection of the growing tax base, rising prosperity and rising compliance. Analyzing this narrative from an economic point of view, we find encouraging data of rapid increase in income tax returns filed by individuals. Get
3. Crore in 2014 to about 8.18 Crore in 2024
,
As prosperity increases, more individuals move up the income ladder and enter the income tax bracket. The middle class in particular has seen a significant uplift, with the Modi government's policy allowing zero tax liability for annual income up to Rs 7.5 lakh, empowering them as significant contributors to the financial health of the country. .The weighted average earnings trajectory, according to SBI Research, tells a compelling story. Over the past decade, weighted average income has nearly tripled
From Rs 3.1 lakh in FY2014 to an impressive Rs 11.60 lakh in FY2021, highlighting India's economic vibrancy and upward mobility.Finally, it seems that Congress and its allies have misjudged corporate versus individual tax contributions. Globally, the distribution of tax revenues between the corporate and individual sectors varies significantly. In OECD countries, corporate taxes account for a modest 9.8 percent of total tax revenues, while personal taxes contribute 23.9 percent. In the US, corporate taxes account for a mere 5.1 percent of tax revenues, while individual taxes account for a significant 41.1 percent. This pattern underlines the important role played by personal taxes in financing public expenditure.In India, the trend is in line with the global pattern.
Corporate tax revenue, although important, takes up a smaller share of the government exchequer than personal taxes. The irony of political differences over tax cuts is clear. Critics of the Congress-led INDI Alliance have criticized the business-friendly tax policies. However, empirical evidence paints a different picture.Under the UPA regime, most tax concessions benefit corporations, leading to distributional disparity. On the contrary, the Modi government's focus on individual incentives has benefited taxpayers – individuals and middle-class families.
.India's income tax landscape reflects not only fiscal dynamism but also social progress. As the tax base expands and prosperity increases, the nation is poised for sustained economic growth driven by the collective contributions of its citizens. In anticipation of the upcoming general elections, the provisional budget of the Modi government emphasizes on enhancing infrastructure while following the path of fiscal prudence.This measured fiscal stance, free from the trappings of populist spending, signals the BJP's confidence in securing a third consecutive term for the country of 1.4 billion citizens.
New companies eyeing manufacturing after October 1, 2019, were given a golden ticket – a chance to pay income tax at just 15 per cent, provided they avoid exemptions and complete their preparations by March 31, 2023, which is That there is a time limit. With whispers of extension through 2024.
Stock market bulls condemned the audacious move. On the day of the announcement, the Sensex jumped 5.3 percent, its most significant one-day rally in a decade, and was headed for a 3 percent rise when the market opened next Monday. Continued.In September 2019, the Modi government reduced the base corporate tax from a hefty 30 per cent to 22 per cent, thereby bypassing the usual budgetary beats and setting the stage for a streamlined tax regime. The move was nothing short of tying the Gordian knot, exposing the entire mess of taxes in which businesses were entangled.
The Congress and the Indian coalition, perhaps unaware of their own narratives, were oblivious to the fact that this pivot from the norm was designed to grease the wheels of commerce and it was the corporate giants who first imposed taxes under the United Progressive Alliance. Enjoyed the discount. (UPA) while the common taxpayer now got benefits under the Modi administration. Later this move reached its organic outcome; The 2019 corporate tax cuts unleashed a trifecta of benefits; Indian corporate tax rates have now stood at par with global competitors, and the low tax rate has trimmed the fat from required rates of return, incentivizing companies to invest more, and the truncated tax rate The cash reserves of the firms have increased, which has marked a new beginning.A flurry of capital expenditure.
The immediate results of the tax cuts were overshadowed by the global upheaval of the Covid pandemic. Yet, hindsight paints a clearer picture as analysts agree that this fiscal shrewdness has tarnished the shine of the Indian economy. This is evidenced by the increase in foreign direct investment (FDI) by US$ 36 billion in 2013-14 and the highest ever annual FDI inflow of US$ 85 billion in the financial year 2021-22.
As the Modi government moved towards fiscal consolidation in 2019, the data paints a rosy picture of the Indian economy.Personal income tax collections with Securities Transaction Tax (STT) increased to Rs 12.01 lakh crore for the financial year 2023-24, showing a huge growth of 24.26 per cent. Net personal income tax collection including ST increased by 25.23 per cent to Rs 10.44 lakh crore.
A huge increase was also seen in tax refunds, which increased by 22.74 percent to Rs. 3.7 lakh crore, a clear indication that the tax coffers were full. The tax collection figures were evidence of the fast pace of the Indian economy. The interim budget revealed a strong 17.70 per cent year-on-year jump in net direct tax collections, reaching Rs 19.58 lakh crore for the financial year 2023-24, up from Rs 16.64 lakh crore in the previous year.Before any refund adjustments, gross direct tax collections for the financial year were a commendable Rs 23.37 lakh crore, up 18.48 per cent from last year's Rs 19.72 lakh crore. Corporate tax collections also grew well, with gross revenue at Rs 11.32 lakh crore. Reached, which is 13.06 percent more than last year. Net corporate tax collection witnessed a growth of 10.26 per cent at Rs 9.11 lakh crore. The initial budgetary forecast for direct tax revenue was pegged at Rs 18.23 lakh crore, which was later revised to Rs 19.45 lakh crore.
The provisional figures are higher than both the original and revised estimates by 7.4 per cent and 0.67 per cent respectively.The story of income tax collection in India is one of prosperity and compliance; The recent surge in collections is more than just numbers – it is a reflection of the growing tax base, rising prosperity and rising compliance. Analyzing this narrative from an economic point of view, we find encouraging data of rapid increase in income tax returns filed by individuals. Get
3. Crore in 2014 to about 8.18 Crore in 2024
,
As prosperity increases, more individuals move up the income ladder and enter the income tax bracket. The middle class in particular has seen a significant uplift, with the Modi government's policy allowing zero tax liability for annual income up to Rs 7.5 lakh, empowering them as significant contributors to the financial health of the country. .The weighted average earnings trajectory, according to SBI Research, tells a compelling story. Over the past decade, weighted average income has nearly tripled
From Rs 3.1 lakh in FY2014 to an impressive Rs 11.60 lakh in FY2021, highlighting India's economic vibrancy and upward mobility.Finally, it seems that Congress and its allies have misjudged corporate versus individual tax contributions. Globally, the distribution of tax revenues between the corporate and individual sectors varies significantly. In OECD countries, corporate taxes account for a modest 9.8 percent of total tax revenues, while personal taxes contribute 23.9 percent. In the US, corporate taxes account for a mere 5.1 percent of tax revenues, while individual taxes account for a significant 41.1 percent. This pattern underlines the important role played by personal taxes in financing public expenditure.In India, the trend is in line with the global pattern.
Corporate tax revenue, although important, takes up a smaller share of the government exchequer than personal taxes. The irony of political differences over tax cuts is clear. Critics of the Congress-led INDI Alliance have criticized the business-friendly tax policies. However, empirical evidence paints a different picture.Under the UPA regime, most tax concessions benefit corporations, leading to distributional disparity. On the contrary, the Modi government's focus on individual incentives has benefited taxpayers – individuals and middle-class families.
.India's income tax landscape reflects not only fiscal dynamism but also social progress. As the tax base expands and prosperity increases, the nation is poised for sustained economic growth driven by the collective contributions of its citizens. In anticipation of the upcoming general elections, the provisional budget of the Modi government emphasizes on enhancing infrastructure while following the path of fiscal prudence.This measured fiscal stance, free from the trappings of populist spending, signals the BJP's confidence in securing a third consecutive term for the country of 1.4 billion citizens.
