The Indian government earns a significant amount of revenue from taxes, but the exact figure can vary each year based on various factors. In the fiscal year 2019-2020, the government’s tax revenue was estimated to be around 16.49 lakh crore rupees.
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The Indian government relies heavily on tax revenue as a major source of income, funding various public services and government initiatives. While the exact figure can vary each year based on economic conditions, government policies, and tax reforms, it is essential to understand the significant role taxes play in India’s fiscal system.
In the fiscal year 2019-2020, the Indian government’s tax revenue was estimated to be around 16.49 lakh crore rupees (approximately 231 billion US dollars). This substantial amount highlights the magnitude of tax contributions by individuals and businesses in India.
To shed light on the importance of taxation, Winston Churchill once famously said, “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” This quote underscores the vital function of taxes in enabling government programs and public welfare.
Here are some interesting facts related to taxes in India:
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Tax Structure: India has a progressive tax structure that categorizes individuals into different income slabs, with varying tax rates accordingly. The tax rates are segmented into different income brackets, ensuring that individuals with higher incomes pay a higher proportion of their earnings as taxes.
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Major Tax Types: The Indian tax system involves various taxes such as income tax, corporate tax, goods and services tax (GST), customs duty, excise duty, and more. These taxes are collected by different government departments to streamline revenue generation.
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GST Implementation: India implemented the Goods and Services Tax (GST) system in July 2017, which aimed to simplify the taxation process by replacing multiple indirect taxes with a unified tax structure. This reform significantly impacted the tax revenue earned by the government.
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Taxpayer Base: India has a sizeable tax base, including both individual taxpayers and corporate entities. The government continually endeavors to widen the taxpayer base to ensure fairness and equity in the taxation system.
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Tax Compliance: Tax compliance has been a focus for the Indian government, with efforts to increase taxpayer awareness, simplify tax filing procedures, and streamline tax administration. Initiatives like technology-driven platforms and increased transparency aim to promote tax compliance.
The table below showcases a hypothetical illustration of the distribution of revenues from various taxes in a particular fiscal year in India:
| Tax Type | Revenue Contribution in Crore Rupees |
| Income Tax | 6,500 |
| Corporate Tax | 4,200 |
| GST | 3,000 |
| Customs Duty | 800 |
| Excise Duty | 700 |
| Other Taxes & Duties | 290 |
| Total | 15,490 |
Please note that the table above provides a mere example and does not represent official figures. The actual revenue distribution may vary from year to year based on economic conditions, policy changes, and other factors.
In conclusion, taxation is one of the primary sources of revenue for the Indian government, with its significance demonstrated through the immense funds generated each year. Understanding the role of taxes in facilitating public services and national development is crucial for fostering an informed citizenry.
Video related “How Much Does Indian government earn from taxes?”
In this section of the video, Dhruv Rathee analyzes the potential advantages and drawbacks of India becoming a 0% income tax country. He notes arguments in favor of abolishing income tax, including increased spending power for taxpayers and the potential for converting black money into white money. He also mentions the savings for the government in terms of tax collection costs. However, Rathee highlights the significant revenue loss for the government and the lack of alternate revenue sources like oil, which countries without income tax rely on. Additionally, he examines the revenue sources of countries without income tax, such as Monaco and Bermuda. Rathee suggests exploring options like increasing GST or introducing new taxes while considering the impact on common people and the overall benefits before making any decisions.
Further answers can be found here
Direct Tax Collections for F.Y. 2022-23 up to 10.01.2023 Direct Tax collection, net of refunds, stands at Rs. 12.31 lakh crore which is 19.55 % higher than the net collections for the corresponding period of last year. This collection is 86.68% of the total Budget Estimates of Direct Taxes for F.Y. 2022-23.
The Indian government’s main source of income is from Goods and Services Tax (GST) and income tax. In 2021-22, GST contributed over 57% to the total tax collection. In 2020-21, 28.5% of the revenue came from GST followed by corporate tax and personal income tax, 28.1% and 28.3% respectively. Income tax and corporate tax collections are the third highest source of government earnings at 15 per cent each.
The Indian government’s main source of income is from Goods and Services Tax (GST) and income tax. Both forms constitute nearly 90% of the government’s total tax collection. In 2021-22, GST contributed over 57% to the total tax collection.
In 2020-21, 28.5% of the revenue came from GST followed by corporate tax and personal income tax, 28.1% and 28.3% respectively.
In January 2022, government’s GST collections touched a record high of Rs 1.4 lakh crore due to rapid economic recovery. * Income tax and corporate tax collections are the third highest source of government earnings at 15 per cent each, the budget document showed.
More interesting questions on the topic
How much money does India make from taxes?
India Tax Revenue data is updated monthly, averaging 6.340 USD bn from Apr 1997 to Apr 2023, with 313 observations. The data reached an all-time high of 44.903 USD bn in Dec 2021 and a record low of -8.877 USD bn in Feb 2022.
How much does the government profit from taxes?
Response: Roughly 40%–50% of federal revenues come from income taxes, despite recent changes to the tax code.
What is the largest source of revenue in India?
Response to this: Personal income tax is the biggest revenue source. Q. Tax is a major source of revenue for the government. Q.
What is the percentage of tax revenue to GDP in India?
Personal income tax as a percentage of GDP has gone up from 2.11 per cent in 2014-15 to 2.94 per cent in 2021-22 fiscal, indicating that taxpayer base is widening as a result of the steps taken by the present government led by Prime Minister Narendra Modi.
How much revenue is collected from personal income tax in India?
As a response to this: In past six years, revenue from personal income tax was 40.24 per cent of the total revenue collected from direct taxes in India. This shows that personal income tax makes a sizable part of the government’s revenue from direct tax collection.
What is India government revenues?
Response: India Government Revenues – values, historical data and charts – was last updated on June of 2023. Government Revenues in India is expected to be 616000.00 INR Tens of Millions by the end of this quarter, according to Trading Economics global macro models and analysts expectations.
How does the government earn money to run India?
The reply will be: In 2021, finance minister Nirmala Sitharaman allocated over Rs 34 lakh crore to finance India’s budget needs. These funds were channelled through various sources. We explore how the government earns money to run the country.Tax and borrowingsare the major sources by which the government funds its expenditures.
How has income tax changed in India?
Response to this: The Income Tax, imposed on incomes, has gone through several changes. In 1985-86, the income tax for a person earning more than Rs 1 lakh was 50 per cent. Today,people earning less than Rs 2,50,000 are exempted from paying income tax. GST biggest source of tax revenue: In 2017, the Goods and Services Tax, or GST, came into effect.
Which tax is paid directly by a person in India?
The answer is: Taxes which are paid directly by individuals and organisations to the government of India come under Direct Tax. Taxes which are paid under Direct Tax include, Personal Income Tax, Capital Gains Tax, Securities Transaction Tax, Perquisite Tax, Corporate Income Tax, Marginal Tax, Rate Tax on Agricultural. 2. Indirect Tax
How does the government earn money to run India?
The reply will be: In 2021, finance minister Nirmala Sitharaman allocated over Rs 34 lakh crore to finance India’s budget needs. These funds were channelled through various sources. We explore how the government earns money to run the country.Tax and borrowingsare the major sources by which the government funds its expenditures.
What is India government revenues?
The reply will be: India Government Revenues – values, historical data and charts – was last updated on June of 2023. Government Revenues in India is expected to be 616000.00 INR Tens of Millions by the end of this quarter, according to Trading Economics global macro models and analysts expectations.
What is the biggest source of tax revenue in India?
GSTbiggest source of tax revenue: In 2017, the Goods and Services Tax, or GST, came into effect. It replaced several multiple taxes levied by the central and state governments. Since then it has become the major source of the government’s indirect tax collection. In 2021-22, over 57% of the indirect tax collection came from GST.