Introduction: This article presents the Indian Government’s data regarding corporate tax collection over the past five years and the revenue impact caused by the reduction of corporate tax rates. Additionally, it delves into the effects of reducing the Corporate Surcharge and the government’s assessments of the associated revenue loss.
Analysis: (a) The corporate tax collection for the last five fiscal years is as follows: FY 2018-19: ₹6,63,572 crores, FY 2019-20: ₹5,56,876 crores, FY 2020-21: ₹4,57,719 crores, FY 2021-22: ₹7,12,037 crores, FY 2022-23: ₹8,28,629 crores (provisional).
(b) The revenue forgone due to the reduction in corporate tax rates is estimated based on the new concessional tax scheme under section 115BAA of the Income-tax Act, 1961. Around 61% of reported aggregated total income of all companies opted for this scheme for FY 2020-21. The estimated revenue loss for FY 2020-21 due to this scheme is approximately ₹100,241 crores.
(c) The Finance Act 2022 did not alter the surcharge on domestic companies, which stands at 10% for companies opting for concessional tax rates under section 115BAA or section 115BAB of the Act. For domestic companies not opting for these sections, the surcharge varies based on total income, with rates of 7% for companies with total income exceeding ₹1 crore but not exceeding ₹10 crores and 12% for companies with total income exceeding ₹10 crores.
(d) & (e) No calculation or assessment of revenue forgone due to the reduction in Corporate Surcharge has been provided in the response. As a result, there is no additional information to detail in this context.
Conclusion: The Indian Government’s data highlights the fluctuations in corporate tax collection over the past five years. Additionally, the impact of reduced corporate tax rates on revenue forgone has been quantified. While the Corporate Surcharge rates have been explained, no information has been provided about calculations or assessments related to the reduction in the surcharge. As economic conditions and tax policies evolve, further updates and insights from the government may emerge.
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GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO. 2139
ANSWERED ON 08.08.2023
REVENUE FORGONE ON ACCOUNT OF CORPORATE TAX
2139. DR. V. SIVADASAN:
Will the Minister of FINANCE be pleased to state:
(a) the amount of Corporate Tax collected, the details for the last five years, year-wise;
(b) the amount of revenue forgone on account of reduction of Corporate Tax;
(c) the revenue forgone on account of a reduction in Corporate Surcharge from 12 per cent to 7 per cent in the Budget of 2022-23;
(d) whether it has undertaken a calculation of the revenue that would be forgone as a result of this reduction and its impact; and
(e) if so, the details thereof and if not, the reasons therefor?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) The amount of corporate tax collection from FY 2018-19 to FY 2022-23 is as under: (Rs. In crores)
| Financial Year | Corporate Tax Collection |
| FY 2018-19 | 6,63,572 |
| FY 2019-20 | 5,56,876 |
| FY 2020-21 | 4,57,719 |
| FY 2021-22 | 7,12,037 |
| FY 2022-23 | 8,28,629# |
Source: Union Finance Accounts of respective years and reports of C&AG/Receipt Budget upto F.Y.2021-22. and Pr. CCA, CBDT for F.Y 2022-23 #Provisional
(b) As mentioned in the statement of Revenue Impact of Tax Incentives under the Central Tax System in Receipt Budget 2023-24, 61% of the reported aggregated total income of all companies have opted for the new concessional tax scheme under section 115BAA of the Income-tax Act, 1961(the Act) for FY 2020-21. Based on this, and neglecting the impact of non- availability of exemptions under this regime, the estimated revenue loss in FY 2020-21 has been reestimated to be Rs. 100,241 crore.
(c) Surcharge on domestic companies has not been changed by the Finance Act 2022, which remains as under-
For domestic company, opting for concessional tax rate under section 115BAA or section 115BAB of the Act :10%.
For domestic companies not opting for section 115BAA or section 115BAB of the Act-
– For companies having a total income exceeding one crore rupees but not exceeding ten crore rupees:7%.
– For companies having a total income exceeding ten crore rupees:12%.
(d) to (e) Does not arise in view of (c).
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