New Delhi: In teh 10 years of Modi government, the tax burden on those earning less than Rs 20 lakh annually has reduced. at the same time, the tax liability of those earning more than Rs 50 lakh annually has increased considerably. Giving this details on Wednesday, a senior official of the Finance Ministry said that it is not true that the middle class will be taxed more in the Modi regime.According to the official, the return filing by those earning more than Rs 50 lakh has almost stopped in the Modi regime. Has increased 5 times. In financial year 2014, 1.85 lakh such returns were filed. 9.39 lakh returns were filed in 2024. He said that ‘due to the strictness of the Modi government against tax evasion and black money, ITR filing by those with income above Rs 50 lakh has increased.’
Personal and Corporate Tax
The total income tax liability of such people was Rs 2.52 lakh crore in 2014, which will increase 3.2 times to Rs 9.62 lakh crore in 2024. the official said that in the income tax collected in 2024, 76 percent was from those earning more than Rs 50 lakh. Due to this increase, ‘the tax burden on the middle class earning up to Rs 20 lakh annually has reduced.’
While clarifying the difference between personal income tax and corporate tax, he said that personal income tax does not mean that it is indeed imposed only on individuals.Personal income tax is actually a non-corporate tax.
Personal income tax will be reduced, government is preparing to change the slabs!
Why zero filing increased
According to the official, zero income tax filings have increased due to increase in exemption limit. In financial year 2014, all people earning more than rs 2 lakh had to pay tax, but in 2024 the exemption limit was increased to Rs 7 lakh. In FY 2014, the share of income tax collection from taxpayers earning less than Rs 10 lakh was 10.17% of the total tax, which came down to 6.22% in 2024.
In 2014, the actual income tax liability of those earning between Rs 2.5 to Rs 7 lakh was Rs 25,000, whereas under the Modi regime, those earning up to rs 7 lakh do not have to pay any income tax. The official said that the average income tax liability of those earning between Rs 7 to 10 lakh in 2024 was Rs 43,000, which was equal to 4-5 percent of their income.
How was the benefit?
The official said that after adjusting for the impact of inflation over a 10-year period, the tax liability for those earning between Rs 10 to 20 lakh has reduced by 60%. In 2014, those earning Rs 10 to 15 lakh paid an average tax of Rs 2.3 lakh, while in 2024 the tax liability would be Rs 1.1 lakh. The average tax liability of those earning between Rs 15 to 20 lakh was Rs 4.1 lakh in 2014 and Rs 1.7 lakh in 2024.
how have the changes in tax compliance affected high-income earners during the modi administration?
Interview: Tax Reforms Under Modi’s Government with Finance Ministry Expert
Time.news Editor: Welcome! Today, we have the privilege of speaking with a senior official from the Finance Ministry to discuss the significant changes in tax policies under the Modi government over the past decade. Thank you for joining us.
Finance Ministry Expert: Thank you for having me. It’s a pleasure to share insights about these vital reforms.
Editor: Let’s dive right in. Can you explain the overall impact of tax reforms on individuals earning less than Rs 20 lakh annually during the Modi regime?
Expert: Certainly! Over the last ten years, the tax burden on individuals earning less than Rs 20 lakh has substantially reduced. In fact, the data shows that while the tax liabilities for higher-income brackets have increased, those in the middle-income range have seen a lighter tax load. This change reflects the government’s commitment to easing financial pressure on the middle class.
Editor: that’s interesting. You mentioned that the tax liability for higher-earners has increased. Can you elaborate on that and provide some figures?
Expert: Absolutely. There’s been a remarkable rise in income tax returns filed by individuals earning over Rs 50 lakh. In the financial year 2014, only 1.85 lakh returns were filed from this group.By 2024,that number has surged to 9.39 lakh returns, marking an almost fivefold increase in compliance. The total income tax liability for this group has jumped from Rs 2.52 lakh crore in 2014 to an estimated rs 9.62 lakh crore in 2024, which constitutes 76 percent of the total income tax collected. This illustrates the government’s firm stance against tax evasion and black money.
Editor: How has this been received by the middle-income taxpayers? Has their tax burden really decreased?
Expert: yes, it has decreased substantially. The exemption limit was increased, allowing individuals earning up to Rs 7 lakh to be exempt from paying income tax. Consequently, the share of tax collection from those earning less than Rs 10 lakh has decreased from 10.17% to 6.22%. Moreover, taxpayers earning between Rs 10 to Rs 20 lakh have seen their liabilities drop dramatically—by about 60% when adjusted for inflation. Such as,individuals earning between Rs 10 to 15 lakh paid an average tax of Rs 2.3 lakh in 2014, which reduces to Rs 1.1 lakh in 2024.
Editor: The sharp rise in zero income tax filings is noteworthy. What led to this increase?
Expert: The increase in the exemption limit has played a crucial role. In 2014, individuals earning above Rs 2 lakh were taxed, whereas now, the threshold is Rs 7 lakh. This policy change has tremendously lightened the tax load for many. In essence, the tax system has become more progressive.
Editor: Moving towards a broader viewpoint, what advice would you give to taxpayers navigating this landscape?
Expert: I would advise taxpayers to stay informed about changes in tax slabs and exemptions. Adjusting financial planning and income strategies can definitely help individuals take full advantage of the available tax benefits. For those in higher income brackets, ensuring proper compliance and accurate filing is essential, given the government’s stringent measures against tax evasion.
Editor: Thank you for that practical insight.As we wrap up, what is the outlook for future tax reforms under the Modi administration?
Expert: The government remains committed to creating a progressive tax framework that supports individual growth while ensuring higher compliance from wealthier individuals. Continuous evaluation of tax structures and regular adjustments based on economic conditions will likely be the focus moving forward.
Editor: Thank you for sharing these valuable insights. It’s clear that the Modi government’s tax reforms have had a profound impact on various income groups. We appreciate your time and expertise today.
Expert: Thank you for having me. It was a pleasure to discuss this crucial topic.