Abstract
Tax levied in India by the Government of India comprises two categories—direct tax and indirect tax. As a proportion of gross tax revenue, direct taxes have been accounting for over half of the total since 2007–2008. Corporation Tax is the highest contributor to direct taxes in the country. The focus of this article is to trace the origin of corporation tax in the country and to examine its growth and trend. Data have been collected and compiled from the Indian Economic Survey Reports, Reports of Comptroller & Auditor General of India and other relevant websites. The pace at which corporate sector has grown over a period of time is remarkably noteworthy. Tax–GDP ratio can be defined as the total tax collected by the government divided by the country’s GDP. From the data compiled, we find that the share of direct taxes in total tax revenue has been gradually increasing. There has been improvement in the ratios of personal Income tax and corporate income tax to GDP. The improvement has been much greater in case of corporate income tax. A significant development in recent past in terms of composition of taxes has been the growth of direct taxes especially in corporate income tax. Despite the criticisms against corporation tax, it has emerged as an important source of revenue due to the rising importance of corporate sector on one hand and because of its impersonal nature on the other.
Similar content being viewed by others
Notes
License tax was replaced by certificate tax. This tax was more comprehensive with a higher exemption limit. Refer S. Ambirajan (1964) The Taxation of Corporate income in India, p 121.
References
Ambirajan S (1964) The taxation of corporate income in India. Asia Publishing House, Bombay
Bandgar PK (2007) Inequities in income-tax. Indian J Acc XXXVIII(1):76–80
Choudhury UDR, Rastogi LN, and Chand G (1975) Income tax, corporate tax & income trends in India. Econ Polit Wkly 10(8):371–374
Chelliah RJ (1996) Towards sustainable growth. Oxford University Press, New Delhi
Dasgupta A (1989) Personal taxation and private financial savings in India (Delhi, NIPFP)
Dasgupta A, Gang IN (2000) Decomposing revenue effects of tax evasion and tax structure changes, international tax & public finance, 7177–7174
Dictionary of public finance (2008) New Delhi, New Century Publications
Government of India, Economic survey reports
Jain SC, Garg R (1994) Taxation and tax planning. Arihant Publishing House, Jaipur
Jain SC, Soni MD (2004) Corporate income tax: an analysis. J Acc Finance 18(2):39–50
Mani S (2010) Financing of industrial innovations in India: how effective are tax incentives for R&D? J Technol Learn Innov Dev 3(2):109–131
Rao VG (1980) Corporation income tax in India. Concept Publishing Company, New Delhi
Report of C & AG of India, March 2002, Union Government (Direct Taxes) No.12 of 2003
Sarma JVM (1986) Investment allowance and private corporate investment in India. NIPFP, Delhi
Sidhu AS (2003) Direct tax reforms in India post liberalisation scenario. Indian J commer 56(2–3):105–117
Singhania VK, Singhania K (eds) (2012) Direct taxes law & practice. Taxmann Publications, Haryana
Srivastava SK, Sharma P, Bhatnagar VK (2010) Impact of changing scenario of taxation in India on tax revenue & GDP. J Acc Finance 24(2):104–112
Suresh M, Khan NA (2011) Trends and tax buoyancy in corporation tax in pre & post liberalization periods in India, IUP J Public Finance
The Navhind Times (2011) DTC to come into force from April 2012, Dec 09
The Outlook (2012) What is thy true worth? March 05
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Reddy, Y.V., George, R. Corporation tax in India: the road travelled so far. Decision 40, 213–221 (2013). https://doi.org/10.1007/s40622-013-0016-y
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40622-013-0016-y