The Congress party on Sunday said that personal income tax collections have far surpassed corporate tax collections. They have vehemently accused the government of allowing billionaires to benefit from over Rs 2 lakh crore in tax cuts, while the middle class continues to endure high taxation. This criticism came a day after data from the Central Board of Direct Taxes (CBDT) revealed that net direct tax collections amounted to Rs 5,74,357 crore (as of July 11, 2024), which includes Corporation Income Tax of Rs 2,10,274 crore and Personal Income Tax of Rs 3,46,036 crore, excluding refunds.
Congress general secretary, in-charge communications, Jairam Ramesh said, “As we head towards the Budget on July 23rd, data has just been released that gross personal income tax collections amounted to Rs 3.61 lakh crores during April 1-July 1 2024 while gross corporate tax collections were Rs 2.65 lakh crores.” “This reconfirms and re-establishes the point we have been making for quite some time–that individuals are paying more tax than companies,” Ramesh said in a post on X.
“When Dr. Manmohan Singh left office, personal income tax was 21% of total tax collections, while corporate tax was 35%. Today, the share of corporate taxes out of total tax collection has dropped sharply to its lowest level in a decade, at just 26%,” he said.
Meanwhile, he added that the share of personal income tax in total tax collections has increased to 28%.
Corporate Tax Cuts and Their Impact
Ramesh noted that corporate tax rates were reduced on September 20, 2019, with the expectation that it would lead to a surge in private investment.
“But that has NOT happened. Instead, private investment has collapsed, from a peak of 35% of GDP under Dr. Manmohan Singh, to below 29% during 2014-24,” he said.
“The corporate tax cut has put over Rs 2 lakh crore in the pockets of billionaires, while the middle class continues to bear the weight of heavy taxation,” Ramesh alleged.
Union Finance Minister Nirmala Sitharaman is set to present the 2024-25 Budget in the Lok Sabha on July 23.
