Tag: Income Tax department

22 May, 2017

Of “Shaky” Demonetisation Statistics, Arun Jaitley and Black Money

We don’t live in a perfect world. And given this, governments like to showcase the positive impact of the decisions they make, all the time. Sometimes, they get very desperate in the process.

Take the case of the economic impact of demonetisation. Most data now coming out clearly shows that the decision did not have a positive impact on the Indian economy. It might have helped the Bhartiya Janata Party to win the Uttar Pradesh assembly elections, but that doesn’t necessarily make it a right decision on the economic front.

Nevertheless, the Modi government would like us to believe that demonetisation has helped the country on the economic front. Early last week the finance minister Arun Jaitley said that “more than 91 lakh people were added to the tax base due the result of the actions taken by the income tax department.”

It was later clarified that 91 lakh people were added to the tax base in 2016-2017(i.e. between April 1, 2016 and March 31, 2017). As per Jaitley’s statement 91 lakh individuals were added to the tax base post demonetisation, which is incorrect.

Meenakshi Goswami, Income Tax Commissioner and the official spokesperson of the Central Board for Direct Taxes (CBDT), told NDTV later in the week that “91 lakh was the total number of new taxpayers enrolled in the financial year 2016-2017.”

Now this makes things interesting. On the face of it, the addition of 91 lakh individuals to the income tax base sounds like a huge number. But when we are talking about any increase or decrease, a number should never be viewed in isolation.

The trouble is that we don’t have long term data on this front because of a change in the definition of “tax base” and “new tax payer added during the year”. The annual report of the ministry of finance for 2015-2016 points out that new taxpayers “added during the year 2014-15 is 76,04,154”. This basically means that 76 lakh new taxpayers were added during 2014-2015. I couldn’t find any data for 2015-2016. Now compare the 91 lakh additions in 2016-2017 to 76 lakh additions in 2014-2015, and suddenly the number doesn’t seem too high, given that no demonetisation was carried out in 2014-2015.

Even if the government doesn’t do anything, taxpayers get added every year, especially when the minimum tax slab continues to remain the same. In 2014-2015, the minimum tax slab was Rs 2,50,000, which is where it continues to be. This basically means that inflation alone would have ensured that more people came into the tax bracket and thus increased the tax base.

Over and above this, as the economy grows and people earn more, more people come into the tax bracket.

Once we take these factors into account, the addition of 91 lakh taxpayers suddenly doesn’t sound much, especially taking into account the disruption that demonetisation caused through the length and the breadth of the country.

Further, Sushil Chandra, chairman of CBDT said that between November 2016 and March 2017, the search actions of the income tax department revealed an undisclosed income of Rs 16,398 crore. On the other hand, the surveys had led to a detection of Rs 6,746 crore during the same period.

Again, if we look at these numbers in isolation, they sound like a lot of money. But that doesn’t turn out to be the case if we look at numbers over a period of time. Take a look at Table 1. It shows the undisclosed income admitted to and detected during the search operations as well as surveys conducted by the income tax department over the last few years.

Table 1: Undisclosed income

Financial Year	Number of groups searched	Undisclosed income admitted (in Rs Crore)	Number of surveys conducted	Undisclosed income detected (in Rs Crore)	Total undisclosed income (in Rs Crore)
2012-2013	422	10,291.61	4630	19,337.46	29,629.07
2013-2014	569	10,791.63	5327	90,390.71	1,01,182.34
2014-2015	545	10,288.05	5035	12,820.33	23,108.38
2015-16	445	11,066.24	4422	9,654.8	20,721.04
2016-17*	222	6,304.71	977	17,62.51	8,067.22

*Up to September 2016 in case of search numbers and August 2016 in case of survey numbers
Source: Ministry of Finance Annual Reports and the Press Information BureauThe numbers for 2016-2017 are incomplete. But there is enough detail that lets us analyse the issue. Between April and September 2016, the total undisclosed income (or black money) admitted through search operations of the income tax department stood at Rs 6,304.71 crore. The undisclosed income detected through surveys conducted between April and August 2016 had stood at Rs 1,762.51 crore. If we add these numbers we get Rs 8,067.22 crore.

Between November 2016 and March 2017, the search actions of the income tax department revealed an undisclosed income of Rs 16,398 crore, as pointed out earlier. On the other hand, the surveys had led to a detection of Rs 6,746 crore during the same period. Adding both these numbers we get Rs 23,144 crore. Adding this to the earlier Rs 8,067.22 crore, we get around Rs 31, 211 crore.

This is the total undisclosed income identified by the income tax department during the course of 2016-2017. The number is incomplete because the information for the month of October 2016 is missing in case of search operations and information for the months of September-October 2016 is missing in case of survey operations.

Nonetheless, it is a good ballpark number to work with. Hence, the total amount of undisclosed income or black money identified by the income tax department in 2016-2017 stood at more than Rs 31,211 crore.

Is it such a big deal? Look at Table 1. The total amount in 2012-2013 had stood at Rs 29,629 crore. This amount hasn’t been adjusted for inflation. It is safe to say that in inflation adjusted terms more undisclosed income was identified by the income tax department in 2012-2013 than in 2016-2017. In 2013-2014, the number stood at Rs 1,01,182 crore, which is significantly more than 2016-2017. And it is worth remembering here that these numbers happened without demonetisation. In fact, as the numbers clearly show the efficacy of the income tax department when it comes to identification of black money has come down since 2014-2015.

To conclude, the rosy picture of demonetisation that the government is trying to paint, is really not true. The more data we look at the clearer this becomes.

Postscript: I recently did a podcast with the writer Amit Varma who is currently the editor of the Pragati magazine, on the Right to Education and how it has screwed up our education system. Most of what I spoke was based on my new book India’s Big Government—The Intrusive State and How It is Hurting Us. You can listen to the podcast here.

The column originally appeared in Equitymaster on May 22, 2017.

13 December, 2016

Demonetisation: How Much of Black Money is in Cash

rupee

One of the original aims of demonetisation was to eliminate “Black Money which casts a long shadow of parallel economy on our real economy.”

Since then through some deft marketing, the prime minister Narendra Modi has shifted the goal of demonetisation towards going cashless and digital payments. Nevertheless, given the fact that demonetisation of Rs 500 and Rs 1,000 notes was carried out to curb black money, it is worth asking how much black money did Indians hold in the form of cash.

Black money is essentially money which has been earned through legal as well as illegal means but on which tax has not been paid. It is also important to understand that people do not hold all their black money in the form of cash in their homes. They convert it into gold and real estate, and move it abroad to tax havens. From there it comes back through Foreign Institutional Investors(FIIs) and is invested in the stock market as well as debt market.

Hence, black money can be held in several forms. From real estate to gold to bonds to stocks. And of course, cash as well. The idea behind demonetising Rs 500 and Rs 1,000 notes was to hurt those who stored black money in the form of cash.

As the government press release accompanying the demonetisation decision pointed out: “Use of high denomination notes for storage of unaccounted wealth has been evident from cash recoveries made by law enforcement agencies from time to time. High denomination notes are known to facilitate generation of black money.”

This essentially leads to the question what portion of black money was held in the form of cash. In May 2012, the finance ministry released a White Paper on Black Money. And that had some very interesting data points. Take a look at the Table 1 below, which deals with the search and seizure operations carried out by the income tax department.

Table 1: Value of assets seized (in Rs. Crore)

Year	Cash	Jewellery	Other assets	Total Undisclosed Income Admitted (in Rs Crore)
2006-07	187.48	99.19	77.96	3,612.89
2007-08	206.35	128.07	93.39	4,160.58
2008-09	339.86	122.18	88.19	4,613.06
2009-10	300.97	132.20	530.33	8,101.35
2010-11	440.28	184.15	150.55	10,649.16
2011-12	499.91	271.40	134.30	9,289.43

Source: White Paper on Black MoneyThe cash seized at the time the search and seizure operations were carried out by the income tax department, is a small portion of the total undisclosed income. This becomes clear from Table 2.

Table 2:

Year	Cash	Total Undisclosed Income Admitted (in Rs Crore)	Proportion of cash in total undisclosed wealth
2006-07	187.48	3,612.89	5.2%
2007-08	206.35	4,160.58	5.0%
2008-09	339.86	4,613.06	7.4%
2009-10	300.97	8,101.35	3.7%
2010-11	440.28	10,649.16	4.1%
2011-12	499.91	9,289.43	5.4%
Total	1,974.85	40,426.47	4.9%

Source: Author calculations based on White Paper on Black Money

If we look at data for the period of six years of close to 24,000 seizure and search operations, cash formed 4.9 per cent of the undisclosed wealth. Also, the proportion varied from 3.7 per cent to 7.4 per cent over the years.

What this data tells us is that people who have black money do not store it in the form of cash. There are better ways of storing that wealth.

The next question that crops up here is that what is the total amount of black money in India. The official sources of the total amount of black money in the economy as a proportion of Indian GDP are very old. Take a look at Table 3.

Table 3:

Year	Black money as a percent of GDP
1975-1976	15 to 18
1980-1981	18 to 21
1983-1984	19 to 21

NIPFP estimate. Source: White Paper on Black Money.

As the White Paper on Black Money published in May 2012 points out: “The last official study for estimating black money generation was conducted at the behest of the Ministry of Finance by the NIPFP [National Institute of Public Finance and Policy] in 1985.”

In 2010, the World Bank came up with estimates of the size of black money in India between 1999 and 2007. Take a look at Table 4.

Table 4:

Year	Black money as a percent of GDP
1999	23.2
2000	23.1
2001	22.8
2002	22.6
2003	22.3
2004	22.0
2005	21.7
2006	21.2
2007	20.7

Source: World Bank

Both the White Paper on Black Money and the recent press release on demonetisation refer to these data points. But they end up flipping the figures. As the press release on demonetisation points out: “The World Bank in July, 2010 estimated the size of the shadow economy for India at 20.7% of the GDP in 1999 and rising to 23.2% in 2007.” As can be seen from Table 4, this is exactly the opposite of the World Bank figures.

I wonder how a mistake of this kind can be made in the case of something as important as demonetisation is. I guess what must have happened is that the Babu drafting the demonetisation press release must have lifted the figures straight from the White Paper on Black Money, which had them wrong in the first place.

Anyway, the nit-picking aside, what these data points clearly tell us is that the black money in India amounts to around one-fifth of the GDP. The Indian Gross Domestic Product (current prices) for 2015-2016 stood at Rs 135.76 lakh crore. Hence, the total amount of black money amounts to Rs 27.15 lakh crore, using these estimates.

Data from the search and seizure operations of the Income Tax Department tells us that black money in the form of cash forms just 4.9 per cent of the total black money. This means that the total black money in the form of cash amounts to Rs 1.33 lakh crore (4.9 per cent of Rs 27.15 lakh crore). This is the money that the government is going after through demonetisation.

The question is, is this worth all the trouble? Take a look at Table 5.

Table 5: Recovery of Black Money

Financial year	Seized assets (in Rs. Crore)	Undisclosed income (in Rs. Crore)
2015-2016(up to November 2015)	470	6,167
2014-2015	762	10,288
2013-2014	808	10,792
2012-2013	575	10,292
2011-2012	906	14,017
2010-2011	775	10,649
2009-2010	964	8,101

Source: Annual reports, Ministry of Finance.

Table 5 clearly shows the limited abilities of the Income Tax Department when it comes to digging up black money in the economy. Even if we ignore this and assume that this time around given the government focus, the Income Tax Department will be able to do better, the question is how much better?

The total amount of black money in the form of cash amounts to Rs 1.33 lakh crore. If the government can recover 50 per cent of this, by taxing it, it amounts to around Rs 66,000 crore. The fall in GDP growth because of demonetisation will turn out to be much greater than this. The Centre for Monitoring Indian Economy estimates that just the transaction cost of demonetisation will amount to Rs 1.28 lakh crore.

To conclude, this brings us back to the question, whether all this was worth the trouble?

The column originally appeared on Equitymaster on December 13, 2016.

3 November, 2016

Here is Another Good Joke: Latest Income Tax Data Suggests India Has Just 23.7 Lakh Landlords

In yesterday’s column, I had explained how only a minuscule portion of India’s population pays a bulk of the personal income tax collected by the government.

This conclusion was drawn based on the detailed income tax data for the assessment years 2013-2014 and 2014-2015, recently released by the government. The income tax returns for the income earned during the financial years 2012-2013 and 2013-2014 were filed during the assessment years 2013-2014 and 2014-2015, respectively.

In late April, earlier this year, the government had released income tax data for the assessment year 2012-2013. Based on this data some interesting observations can be made. In today’s piece, I will look at income from house property declared by Indian taxpayers.

Let’s look at Figure 1. It has details regarding individuals who declared a positive income from house property. Income from house property can also be negative.

Those declaring a negative income from house property would include individuals who have taken on a home loan. Interest paid on a home loan is allowed as a deduction against taxable income within a certain limit, on self-occupied property.

For the assessment years under consideration an interest of up to Rs. 1.5 lakh paid on a home loan could have been taken as a deduction against taxable income.

But that is not of importance in this piece. What we are considering here are taxpayers who are making some money from the homes that they own. These taxpayers are essentially landlords who own homes, rent them out and make money in the process.

Figure 1:

Assessment Year	Number of individuals	Total Income declared (in Rs. Crore)	Average Income (in Rs.)
2012-2013	19,95,739	33,277	1,66,740
2013-2014	21,87,017	39,498	1,80,602
2014-2015	23,66,527	45,899	1,93,951

Source: Author’s calculations based on data released by the Ministry of Finance.

As per the income tax records, in the assessment year 2014-2015, the total number of landlords in the country stood at around 23.66 lakh. Of course, this number included those showing a notional rent for tax purposes as well.

In the assessment year 2012-2013, the total number of landlords had stood at 19.95 lakh. This means a jump of 18.6 per cent over a two-year period. The average rent collected in assessment year 2014-2015, was at Rs. 1.94 lakh against Rs. 1.67 lakh in assessment year 2012-2013.

The average as usual hide the details. In the assessment year 2014-2015, more than 15.8 lakh individuals declared an average income of Rs. 66,000 from house property during the year. This works out to a monthly income of Rs. 5,500. Or this is the amount that these individuals made every month by renting out their homes.

In the assessment year 2012-2013, more than 14.55 lakh individuals had declared an average income of Rs. 60,000 per year. This works out to a monthly income of Rs. 5,000. Hence, it is safe to say that as per income tax records, the average landlord in the country earned a monthly income of Rs. 5,500 during the assessment year 2014-2015.

This figure seems to be low and out of place with the prevailing rents. People paying income tax primarily live in the big cities and such a low rent in a big city is practically unheard of.

Also, the total number of landlords in the assessment year 2014-2015 stood at 23.66 lakh. This is an extremely low number. As Arjun Kumar writes in a research paper titled India’s Residential Rental Housing: “More than one-tenth (11.1%) of the households in India lived in rented houses in 2011, and, in this respect, there was a heavy bias towards the urban sector. Almost four-fifths of the total households living in rented houses in India (27.4 million) were in urban sector (21.7 million). Overall, the proportion of households living in rented houses was 3.4% and 27.5% in rural and urban sectors, respectively.”

Hence, the total number of rented houses in the country as per the 2011 Census stood at 27.4 million or 274 lakh. In urban India, the number stood at 21.7 million or 217 lakh. Now compare this to the fact that only 23.7 lakh individuals in the assessment year 2014-2015 declared income from house property. This clearly tells us that many landlords are essentially not declaring the income that they earn from their homes.

It further means that rents are being paid in cash and in the process the total amount of black money in the country has gone up. What is also noteworthy is that Census 2011 numbers are now more than half a decade old. The total number of rental households would have only gone up since then.

In fact, as Kumar writes: “The number of households living in rented houses in India increased by 7.1 million (35.3%), from 20.2 million in 2001 to 27.4 million in 2011. The rate of growth in the number of rented households was higher than that of the growth rate of total number of households (28.5%) in India.” There is no reason for this trend to have changed since 2011.

To conclude, when we talk about the black money problem that prevails in the country we tend to talk about the buying and selling of real estate as being a major reason. Nevertheless, the data clearly suggests that rental income is also a major part of the black money problem.

The column originally appeared in Vivek Kaul’s Diary on November 3, 2016

2 November, 2016

0.15 Per Cent of India’s Population Pays 77% of Its Personal Income Tax

A few days before Diwali, the Ministry of Finance released detailed income tax data for the assessment years 2013-2014 and 2014-2015. The income tax returns for the income earned during the financial years 2012-2013 and 2013-2014 were filed during the assessment years 2013-2014 and 2014-2015, respectively.

In late April, earlier this year, the government had released income tax data for the assessment year 2012-2013. We now have data for three years and it makes for an interesting reading. Let’s look at Figure 1.

Figure 1:

Assessment year	Total number of returns filed by individuals	Total number of individuals paying income tax
2012-2013	287,66,258	125,18,636
2013-2014	335,85,294	166,47,061
2014-2015	365,13,034	190,97,559

Source: www.incometaxindia.gov.in

The number of individuals filing income tax returns has gone up from around 2.88 crore in assessment year 2012-2013 to around 3.65 crore in assessment year 2014-2015. This is a good jump of close to 27 per cent over a two-year period.

At the same time the number of individuals paying income tax has gone up from 1.25 crore to 1.91 crore, during the two-year period. This is a jump of 52.6 per cent. What this means is that a greater proportion of individuals filing income tax returns is also paying income tax though a large proportion still just files an income tax return without paying any income tax. Let’s look at Figure 2.

Figure 2:

Assessment year	Proportion of individuals filing income tax returns who also pay income tax
2012-2013	43.5%
2013-2014	49.6%
2014-2015	52.3%

During the assessment year 2012-2013 43.5 per cent of individuals filing income tax returns also paid some income tax. This has jumped to 52.3 per cent in assessment year 2014-2015. A greater proportion of those filing income tax also paying income tax is good news.

How do these numbers look with respect to the overall population? Let’s look at Figure 3.

Figure 3:

Assessment year	Total number of returns filed by individuals (in Crore)	Population (in Crore)*	Proportion of population filing income tax returns
2012-2013	2.88	126.4	2.3%
2013-2014	3.36	127.9	2.6%
2014-2015	3.65	129.5	2.8%
* Data sourced from World Bank

As can be seen from Figure 3, there has been some improvement in the proportion of population which files income tax returns. In the assessment year 2012-2013 it had stood at 2.3 percent. Two years later in assessment year 2014-2015, it had jumped to 2.8 per cent.

How about those paying income tax and not just filing income tax returns. Let’s look at Figure 4.

Figure 4:

Assessment year	Total number of individuals paying income tax (in Crore)	Population (in Crore)*	Proportion of population paying income tax
2012-2013	1.25	126.4	1.0%
2013-2014	1.66	127.9	1.3%
2014-2015	1.91	129.5	1.5%
* Data sourced from World Bank

As can be seen from Figure 4, in assessment year 2012-2013, 1 per cent of the population paid income tax. By assessment year 2014-2015, this had jumped to 1.5 per cent. While this is a substantial improvement, 98.5 per cent of the population still does not pay income tax. This is a reflection both, of our poverty and our scant respect for income tax laws.

There is another interesting trend that comes out of the data. A bulk of individuals who pay income tax, essentially pay an income tax of less than or equal to Rs. 1.5 lakh. Let’s look at Figure 5, which deals with individuals paying an income tax of less than or equal to Rs. 1.5 lakh per year.

Figure 5

Tax payable less than or equal to Rs 1.5 lakh
Assessment year	Number of individuals	Total tax paid (in Rs. Crore)	Average tax paid (in Rs.)
2012-2013	111,28,419	23,446	21,069
2013-2014	150,64.997	37,107	24.631
2014-2015	171,79,474	43,964	25,591

In assessment year 2012-2013, 88.9 per cent of the income taxpayers paid an income tax of less Rs. 1.5 lakh. This had jumped to close to 90 per cent in assessment year 2014-2015. This means the bulk of the income tax paid by individuals is actually paid by a very small number of individuals. Let’s look at Figure 6, which deals with individuals paying an income tax of greater than Rs. 1.5 lakh per year.

Figure 6:

Tax payable greater than Rs 1.5 lakh
Assessment year	Number of individuals	Tax paid (in Rs. Crore)	Average tax paid (in Rs.)
2012-2013	13,90,217	91,109	6,55,358
2013-2014	15,82,064	1,02,393	6,47,211
2014-2015	19,18,085	1,47,244	7,67,661

Now compare Figure 5 with Figure 6 and it is more or less clear that those paying a tax of greater than Rs. 1.5 lakh during the assessment year, even though they are very small in number, pay the bulk of the individual income tax.

In assessment year 2014-2015, around 19.18 lakh individuals paid Rs. 1.47 lakh crore as income tax in total. The total tax paid by individuals during the year was Rs. 1.91 lakh crore. So, a very small number of people paid around 77 per cent of the individual income tax. Let’s look at Figure 7.

Figure 7:

Assessment Year	Total tax paid by individuals	Total tax paid by individuals paying more than Rs. 1.5 lakh tax per year	Proportion
2012-2013	1,14,555	91,109	79.5%
2013-2014	1,39,500	1,02,393	73.4%
2014-2015	1,91,208	1,47,244	77%

Hence, those paying an income tax of greater than Rs. 1.5 lakh, paid 77 per cent of the income tax paid by individuals during the assessment year 2014-2015. It would be interesting to see what proportion of the population do they make up for. Let’s look at Figure 8.

Figure 8:

Assessment year	Number of individuals who paid an income tax of greater than Rs. 1.5 lakh	Population (in Crore)	Proportion of population	Proportion of income tax paid by individuals
2012-2013	13,90,217	126.4	0.11%	79.5%
2013-2014	15,82,064	127.9	0.12%	73.4%
2014-2015	19,18,085	129.5	0.15%	77%

Hence, in assessment year 2014-2015, 0.15 per cent of the population paid 77 per cent of the income tax paid by individuals. This is a slight improvement over 0.11 per cent of the population paying close to four-fifths of the income tax paid by individuals in assessment year 2012-2013.

This as I said earlier is both because we are a poor country and at the same time have scant respect for income tax laws. At the same time our income tax laws are extremely complicated as well.

The article originally appeared in Vivek Kaul’s Diary on November 2, 2016

3 May, 2016

0.11 Per Cent of India’s Population Pays 80% of Its Personal Income Tax

The Income Tax department shared some very interesting data last week. In today’s column I will look at these data points and try and make some sense of them.

a) In the assessment year 2012-2013, around 2.87 crore individuals filed income tax returns. The total income tax collected from these individuals amounted to Rs 1,14,555 crore. In assessment year 2012-2013, income tax returns for the income earned in 2011-2012 had to be paid.

The interesting thing nonetheless was that only 1.25 crore individuals paid any income tax. Data from the World Bank shows that in 2011 the population of India was 124.7 crore. This basically means that in assessment year 2012-2013 around 1% of India’s population basically paid income tax.

One explanation for this is straightforward that income from agriculture is untaxed. Close to 50% of the country’s population still depends on agriculture for a living. Further, this also tells you that India is a poor country, where most people earn a taxable income of under Rs 2.5 lakh per year, above which one has to start paying income tax.

What this also tells us among other things, is that a major part of the Indian economy continues to operate in the black zone. Hence, a tremendous amount of black money is generated, on which income tax does not get paid.

b) Around 3.94 lakh Indians pay a tax of greater than Rs 5 lakh. In total they paid an income tax of Rs 64,313 crore in assessment year 2012-2013, which made up for around 56% of the income tax paid by individuals.

Further, around 13.9 lakh Indians paid an income tax of greater than Rs 1.5 lakh. In total, they paid an income tax of Rs 91,110 crore. This made up for around 79.5% of the total income tax paid by individuals for the assessment year 2012-2013.

This means that around 0.11% of India’s population (13.9 lakh divided by 124.7 crore) paid around 80% of the income tax paid by individuals in the assessment year 2012-2013. This is one data point that clearly tells you how few Indians actually pay income tax.

c) Only around 26 lakh Indians filed for income from house property under the individual category. A total income of Rs 29,927 crore was declared under this category.

Of this around 6.06 lakh showed losses under income from house property. This would primarily include people who have taken on a home loan to buy a house and are repaying it. The interest paid on a home loan can be adjusted as a loss. Prima facie the number seems to be extremely low.

Further, this means that around 19.95 lakh people declared “real” income from house property. This is another extremely low number. What this means is that there are only 20 lakh landlords in the country. This is a clear indication of the fact that most landlords are getting their rents paid in cash and not paying any income tax on it. It may also be an indication of the fact that many landlords have not put up their homes on rent.

d) The data points released by the income tax department answers a major question—what is the effective rate of personal income tax in India. We all know that there are three income tax rates of 10%, 20% and 30%, with a higher rate being applied as the income goes up. Nevertheless, what portion of income is the government actually able to collect as tax, after all the deductions are applied, is an interesting question to answer.

Income under the head	(in Rs crore)
Salary	6,27,200
House property income	29,927
Business income	4,03,251
long term capital gain	30,479
short term capital gains	3,290
Other sources income	1,28,020
Interest income	44,918
Total Income	12,67,085
Total tax collected	1,14,555
Effective rate of income tax	9.04%

Take a look at the above table. For the assessment year 2012-2013, individuals declared a total income of Rs 12,67,085 crore. On this an income tax of Rs 1,14,555 crore was collected. This means an effective rate of 9.04%. Hence, the effective rate of income tax is even lower than the lowest rate of 10%. This is clearly a reason to worry for the government.

e) While the release of detailed income tax data is a good start, much more remains to be done. First and foremost, data from more years needs to be released. This means releasing data from prior to assessment year 2012-2013. It also means releasing data from years after assessment year 2012-2013. More data would help researchers spot trends over the years.

The data released last week is now almost half a decade old. It would be great that in the time to come, the income tax department can be more prompt in releasing such data.

f) One major complain I have with the income tax department on this is that they released the data in the form of PDF files. While that is fine, data in the form of excel files should also have been released. This makes the data machine readable immediately and is of tremendous importance for researchers. Otherwise a lot of time is uselessly spent in transferring data from the PDF files to an excel file.

g) Also, it would have been great if exempt income (like dividend income from stocks, long-term capital gains on stocks etc.), would also have been declared. This would have given us some idea how much potential tax is the government losing out on.

To conclude, this is a good start. Nevertheless, more income tax data needs to be declared in the time to come.

The column originally appeared on the Vivek Kaul Diary on May 3, 2016