India rsquo s income tax department released time series data for the period 2000 01 to 2014 15 Cons...........

Economic Affairs Tax System

India’s income tax department released time series data for the period 2000-01 to 2014-15, Consider the following statements regarding this data:

1. There is a positive sign of increase in ratio of direct taxes to GDP.

2. Ratio of Tax to GDP continuously on decline.

3. Currently poor of country are bearing more burden of tax than rich .

4. 1% of population accounted for 20 % of total tax

Which of the statements given above is/are correct:

2 , 3 and 4 only

1 and 2 only

1, 3 and 4 only

1,2 and 3

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Explanation:

exp: There is barely an increase in tax-to-GDP ratio. This means economic growth has not delivered greater fiscal space for public spending to meet the needs of citizens.
Government has more reliance on indirect taxes, which are regressive in nature and have negative impact on poor.
In 2009-10, direct taxes peaked at 60.8 per cent of total taxes and the provisional data for 2015-16 suggest that the share of direct taxes was only 51 per cent. This also because direct tax collections did not even increase as rapidly as money incomes did.
In 2014-15, nominal GDP increased by 10.5 per cent but direct tax collections increased by less than 9 per cent. In 2015-16, nominal GDP increased by 8.2 per cent but direct taxes increased by only 6.7 per cent. In that same year, indirect taxes increased by 31 percent, mainly because of government decision to keep the oil price high with the help of duties on petroleum products. There is barely an increase in tax-to-GDP ratio. This means economic growth has not delivered greater fiscal space for public spending to meet the needs of citizens.
Government has more reliance on indirect taxes, which are regressive in nature and have negative impact on poor.