The central government on Monday published its accounts for 2020-21 which says that the corporate tax collection fell below personal income tax collection for the first time in 12 years.
The government has collected the corporate income tax collection for Financial Year 2021 stood at Rs 4.57 lakh crore. The Corporate Income Tax is charged from corporations or companies.
The total personal income tax collected was at Rs 4.69 lakh crore. The personal income tax is levied on individual incomes.
Both corporate and personal income tax collections shrunk in the financial year 2020-21 by 18 per cent and 2.3 per cent, respectively, data from the Controller General of Accounts suggest. The Modi government in September 2019 had slashed corporate tax rates by around 10 percentage points. New corporate tax rates for existing companies stand at 25 per cent while for new ones in manufacturing, it is 17 per cent.
Due to the sharp reduction in the tax rates as well as the economic slowdown, corporate tax collections have been falling over the last two years after peaking at Rs 6.6 lakh crore in 2018-19.
Corporate tax collections fell 16 per cent in 2019-20 and then 18 per cent in 2020-21. The collections have actually fallen by more than 31 per cent over the levels seen in 2018-19.
Nearly 15 lakh income tax returns were filed by firms in 2020-21 for income earned the previous year. However, only 13 percent of these returns were for income ranges of more than Rs 5 lakh. The remaining 87 per cent of the returns were for income up to Rs 5 lakh.
In contrast, over 13 lakh returns were filed in 2019-20 (for income earned in 2018-19), with 18 percent of the returns were for income ranges of over Rs 5 lakh. The remaining 82 per cent were returns filed for income of up to Rs 5 lakh.
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