Aug 04, 2024 07:56 PM IST
Corporate taxes formed a large bulk of the defaults, adding up to ₹3.97 lakh crore and capital gains tax and transfer pricing defaults was ₹4.81 lakh crore.
Tax defaults in India have skyrocketed by 1000% in the last ten years and litigation associated with it has also consequently risen, according to a Moneycontrol report, which cited data compiled from various Union Budgets.
How much tax default did India witness?
Tax notices of ₹9.08 lakh crore are unpaid in the financial year 2022-23, compared to ₹80,003 crore in 2013-14. However, notices adding up to ₹4.23 lakh crore were sent just less than two years ago.
Notices totaling ₹2.13 lakh crore were sent between 2-5 years back, while nearly ₹1.43 lakh crore of taxes remain unpaid after 10 years.
Also Read: Nvidia’s new AI chip delay due to design flaws to affect Amazon, Google, and Microsoft: Report
Corporate taxes form a bulk of the defaults. Unpaid corporate taxes added up to ₹3.97 lakh crore and income other than corporate tax defaults, which includes capital gains tax and transfer pricing, was ₹4.81 lakh crore.
This can be attributed to multiple factors like the complexity and frequent changes in the law which creates confusions for businesses, and tax notices being sent to companies under the Insolvency and Bankruptcy Code(IBC), according to the report which cites legal experts.
How much has tax-related litigation increased?
Consequently tax-related litigation has also sharply increased, more than doubling to ₹12.21 lakh crore in 2022-23, compared to ₹5.03 lakh crore in 2013-14.
Corporate tax litigation accounted for ₹6 lakh crore and income other than corporate amounted to ₹4.5 lakh crore.
However, indirect taxes like GST accounted for only ₹2,317 crore, but is expected to rise next year due to the number of GST notices given to various companies according to the report.