Changing Compliance Landscape Towards A Wider Tax Net

On 31 December 2016, Prime Minister Narendra Modi shared a statistic that sparked curiosity amongst many – only 2.4 million people in India report a taxable income of more than INR 1 million. This revelation resulted in a series of newspapers quoting reports pointing to income indicators. For example, 2.5 million luxury cars are sold in India every year.

In his budget speech of 2017, the Finance Minister also shared similar statistics. For instance, out of 1.39 million companies in India, only 0.59 million companies have filed their tax returns for the year ending 31 March 2016. Out of 7.6 million individual taxpayers declaring income above INR 500,000, 5.6 million taxpayers belong to salaried class. Indicating the low level of tax compliance in India, The Finance Minister remarked that "We are largely a non-tax compliant society".