India’s net direct tax collections amounted to ₹14,09,640.83 crore for FY22, which is the highest collection ever, signaling that the Indian economy has bounced back after two years of the pandemic.
GS III- Indian Economy
Dimensions of the Article:
- About Direct Tax in India
- About Central Board of Direct Taxes (CBDT)
- As against ₹14.09 lakh crore this year, our collection in 2020-21 was only ₹9.45 lakh crore.
- In a single year, the economy has moved upward by nearly ₹4.5 lakh crore, registering a growth of 49%.
- The collection is the best-ever as far as income tax and corporation tax are concerned.
- The direct tax-to-GDP ratio is around 12%.
- The Central Board of Direct Taxes (CBDT) was working to raise the ratio to 15-20% in 5-10 years.
About Direct Tax in India
- A direct tax can be defined as a tax that is paid directly by an individual or organization to the imposing entity (generally government).
- A direct tax cannot be shifted to another individual or entity.
- The individual or organization upon which the tax is levied is responsible for the fulfillment of the tax payment.
- The Central Board of Direct Taxes deals with matters related to levying and collecting Direct Taxes and formulation of various policies related to direct taxes.
- A taxpayer pays a direct tax to a government for different purposes, including real property tax, personal property tax, income tax or taxes on assets, FBT, Gift Tax, Capital Gains Tax, etc.
About Central Board of Direct Taxes (CBDT)
- The Central Board of Direct Taxes (CBDT) is a Statutory Body functioning under the Central Board of Revenue Act, 1963.
- It is official Financial action task force unit.
- CBDT is a part of the Department of Revenue in the Ministry of Finance, Government of India.
Composition of CBDT
- The CBDT Chairman and Members of CBDT are selected from Indian Revenue Service (IRS), a premier civil service of India, whose members constitute the top management of Income Tax Department.
- The Central Board of Direct Taxes consists of a Chairman, and six members that deal with the following:
- Income Tax & Revenue
- Legislation & Computerization
- Audit and Judicial
- Transaction Processing System (TPS) & System
Functions of CBDT:
- CBDT is responsible for administration of the direct tax laws through Income Tax Department.
- The officials of the Board in their ex-officio capacity also function as a Division of the Ministry dealing with matters relating to levy and collection of direct taxes.
- CBDT provides essential inputs for policy and planning of direct taxes in India as well.
It deals with matters related to levying and collecting Direct Taxes.
- Formulation of various policies.
- Supervision of the entire Income Tax Department
- Suggests legislative changes in Direct Tax Enactments
- Suggests changes in tax rates
- Proposes changes in the taxation structure in line with the Government policies.
-Source: The Hindu