Direct Tax Collection in Negative Zone – Free PDF Download

• The tax department had managed to collect only  Rs 7.3 lakh crore as of January 23.
• This is more than 5.5% below the amount  collected by the same point last year, said a senior tax official.

• Officials typically garner about 30-35% of annual  direct taxes in the final three months.
• But despite their best efforts, direct tax  collections this financial year were likely to fall  below the Rs 11.5 lakh crore collected in 2018-19.
• Thus the direct tax collections for this year could  end up roughly 10% below fiscal 2019.
• “Forget the target. This will be the first time that  we’ll see a fall in direct tax collection ever,“ said a tax official in New Delhi.

MAIN REASONS BEHIND THIS DECLINE?

• Cut in corporate tax rates in September
• Overall economic slowdown  Implementation of the faceless tax assessment

LAFFER CURVE

• Developed in 1974 by economist Arthur Laffer.
• It show the relationship between tax rates and the amount of tax revenue collected by governments.
• Tax revenues change when the tax rate is either increased or decreased.
• Inverted-U shape.

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