How is your tax paid money utilized by the Government of India?

We had posted an article about tax proposals of Union Budget 2015. Now in this article, let us understand the macro financial matters of the Government of India (GOI). This is more about numbers and figures. Let me try to make it interesting as much as I can!

How much Revenue (money) is the Government estimating to get during the Financial Year 2015-16?

Tax Revenue

GOI is estimating to get Rs.14,49,490 Crores as Tax Revenue for FY 2015-16.

Tax Revenue Break-up

Income Tax – The taxes paid by individuals on their income such as salary, rent, capital gain or interest is classified as ‘Taxes on Income’. The total revenue from income tax is estimated at Rs.3,27,367 Crores.

Corporation Tax – The taxes paid by companies on their business income is called as Corporate Tax or Corporation Tax. (This is nothing to do with property taxes paid to city municipality). The estimated tax collection on this account is Rs.4,70,628 Crores.

Wealth Tax – Nil, as this particular tax is abolished from FY 2015-16 onwards.

Customs Duty – The taxes paid by individuals, companies and others towards import of goods are covered under this head. The estimated taxes from Customs Duty is Rs. 2,08,336 Crores.

Excise Duty – This is an indirect tax paid by companies, firms or business entities on the goods manufactured in India. The estimated taxes from Excise duty is Rs.2,29,808 Crores.

Service Tax – This is also an indirect tax paid by companies, firms or business entities on the services provided by them. The estimated taxes from Service Tax is  Rs.2,09,774 Crores.

Tax on Union Territories – Rs.3577 Crores

Non- Tax Revenue

GOI is estimating to get Rs.2,21,733 Crores of Non -Tax Revenue for FY 2015-16

The breakup of Non Tax Revenue

• Interest receipts Rs.23600 Crore
• Dividend and Profits from PSU and Banks Rs.100651 Crore
• External Grants Rs.1774 Crore
• Other Non tax revenue Rs.94412 Crore
• Receipt of Union Territories Rs.1296 Crore

Capital Receipts – This includes recovery of loan, fresh loan, etc and the amount is Rs.635904 Crore.

This is similar to our individual finance! The expenditure is more than income! The government is taking loan of over Rs.5 Lakh Crores during the year to meet its expenses. Of all the money, only a meager Rs.1.35 Lakh Crores is being used for developmental work.

Summary – Totally the government estimates to receive Rs.23,07,130 Crores, of which, Rs.5,23,958 Crores is given to State Governments as their share in the taxes. So, the net balance left with the Central government is Rs.17,83,172 Crores. How will they spend this amount? I will write in tomorrow’s post.

Thought for the day

The problem is not that people are taxed less; the problem is that the government spends too less on developmental activities.

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