Money9 Edit | Honest taxpayers come to government’s aid amid pandemic mayhem

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The Income Tax department has come out with tax collection figures for 2020-21, which have come in at 5% higher than the revised estimates of 2020-21 but 10% lower than 2019-20. Among the maze of numbers, one fact is that the personal income tax payers have come to the rescue of revenue collections.

At Rs 4.71 lakh crore, the taxes paid by citizens pipped the contributions of corporates, which stood at Rs 4.57 lakh crore. Corporate taxes collection could be lower due to the Rs 1,45,000-crore tax cut given by the government to boost the economy during the pandemic.

But the individuals should also be given some benefits for honestly paying taxes. This was a period of sharp salary cuts and deep job losses. Despite these two factors, if the individual tax collection is more than corporates, it is commendable. To keep this momentum going, the government needs to expand the taxpayers base and provide some more relief to the honest taxpayers.

The refunds of Rs 2.61 lakh crore shows a 42% jump from 2019-20. This would indicate that people are paying more taxes during the year and taking exemptions and deductions while filing returns. This puts pressure on government finances as it releases huge amount of refund in a short span of time.

The government should allow the taxpayers to deposit lesser amount of tax during the year and a final instalment while filing returns. This may reduce the refunds by the government and also leave more money in the hands of taxpayers, which can be spent on their needs and create more demand.