Revenue forgone under the Central Tax System:
Financial Years 2010-11 and 2011-12
The main objective of any tax system is to raise revenues to fund Government expenditures. The amount of revenue raised is
determined to a large extent by tax bases and tax rates. It is also a function of a range of measures – special tax rates, exemptions,
deductions, rebates, deferrals and credits – that affect the level and distribution of tax. These measures are sometimes called "tax
preferences". They have an impact on Government revenue (i.e. they have a cost) and reflect the policy choices of the Government.
Tax preferences may be viewed as subsidy payments to preferred taxpayers. Such implicit payments are referred to as "tax
expenditures" and it is often argued that they should appear as expenditure items in the Budget. In this context, the basic issue is
not one of tax policy but one of efficiency and transparency – programme planning requires that the policy objectives be addressed
explicitly; and programme budgeting calls for the inclusion of such outlays under their respective programme headings. Tax
expenditures are spending programmes embedded in the tax statute.
A tax expenditure or a revenue forgone statement was laid before Parliament for the first time during Budget 2006-07 by way
of annex-12 of the Receipts Budget 2006-07. It was well received by all quarters and gave rise to a constructive debate on the
entire gamut of issues concerning fiscal policy. It also lent credence to the Government's intention of bringing about transparency
in the matter of tax policy and tax expenditures.
The second edition of this statement was placed before Parliament during Budget 2007-08 by way of annexure-12 of the
Receipts Budget and also by way of a separate budget document titled "Statement of Revenue Forgone". Thereafter, it was again
placed before Parliament during Budget 2008-09, 2009-10, 2010-11and 2011-12.
Like in the earlier six years, this Statement seeks to list the revenue impact of tax incentives or tax subsidies that are a part of
the tax system of the Central Government. The revenue forgone on account of such tax incentives has been estimated in respect
of most items of tax preferences. The estimates are for financial year 2010-11, the most recent year for which data is available.
However, an attempt has also been made to project the revenue forgone for income of the financial year 2011-12 on the basis of
the revenue forgone figures of the financial year 2010-11 projected on the provisional tax growth figures for 2011-12.
The estimates of the tax expenditures have been made on the basis of the following assumptions:-
(a) The estimates and projections are intended to indicate the potential revenue gain that would be realised by removing
exemptions, deductions, weighted deductions and similar measures. The estimates are based on a short-term impact
analysis. They are developed assuming that the underlying tax base would not be affected by removal of such measures.
As the behaviour of economic agents, overall economic activity or other Government policies could change along with
the elimination of the specific tax preference, the revenue implications could be different to that extent.
(b) The cost of each tax concession is determined separately, assuming that all other tax provisions remain unchanged.
Many of the tax concessions do, however, interact with each other. Therefore, the interactive impact of tax incentives
could turn out to be different from the revenue forgone calculated by adding up the estimates and projections for each
provision.
The assumptions and methodology adopted to estimate the revenue forgone on account of different tax incentives are
indicated at the relevant places in this Statement.
Direct Taxes
The Income-tax Act, inter alia, provides for tax incentives to promote savings by individuals; exports; balanced regional
development; creation of infrastructure facilities; employment; donations for charity and rural development; scientific research
and development; and the cooperative sector. Accelerated depreciation is also provided as an incentive for capital investment.
Most of these tax benefits can be availed of by both corporate and non-corporate taxpayers. This Statement attempts to estimate
some of the major tax expenditures.
A. Corporate Sector
Large business is mainly organised as companies. The Income-tax Department has received 4,59,270 corporate returns
electronically up to 31
st
December, 2011 for the financial year 2010-11 [i.e., assessment year 2011-12 ]. These returns constitute
about 90% of the total corporate returns expected in financial year 2011-12. These companies reported corporate tax payable as
` 2,28,158 crore [inclusive of surcharge and education cess] for their income of financial year 2010-11. They also reported
` 15,928 crore as Dividend Distribution Tax payable during the financial year 2010-11.
For the purposes of estimating the tax expenditure, data pertaining to these 4,59,270 companies
1
was culled from the
database for analysis and is detailed in tables 1 to 5 and Appendix to this statement. Table 1 profiles these companies across
1 The sample size for financial year 2009-10 was 4,27,811.
2122
profit ranges. The following facts emerge from an analysis of the data:-
• 2,66,347 companies (57.99 %) reported ` 9,46,731 crore as profits before taxes as per their books and a total taxable
income ( "total income")
2
of ` 6,23,572 crore for the financial year 2010-11.
• 1,61,596 companies ( 35.19 %) reported ` 2,03,564 crore as losses.
• 31,327 companies ( 6.82 %) reported Nil profit.
The effective tax rate
3
of the entire sample was 24.10 per cent
4
[as against the rate of 23.53 per cent reported in 2009-10].
The effective tax rate for corporates has been gradually rising (20.55% for 2006-07; 22.44% for 2007-08; 22.78% for 2008-09;
23.53% for 2009-10 and 24.1% for 2010-11). This is a result of the gradual phasing out of profit linked deductions and the levy of
Minimum Alternate Tax on companies.
Table 1: Profile of sample companies across range of profits before taxes
(financial year 2010-11) [sample size – 4,59,270]
Sl. Profit Before Taxes Number of Share in Share in Share in Ratio of Effective
No. Companies Profits Total Total Total Tax Rate
Before Income Corporate Income (in %)
Taxes (in %) Income Tax to Profits
(in %) Payable Before
(in %) Taxes
(in %)
1 Less than Zero 161596 0.00 0.27 0.208 - -
2 Zero 31327 0.00 4.22 1.86 - -
3 `0-1 Crore 237580 2.95 3.47 3.29 80.81 26.77
4 `1-10 Crore 22627 7.22 7.52 7.82 71.73 26.08
5 `10-50 Crore 4403 9.92 9.45 10.24 65.71 24.87
6 `50-100 Crore 735 5.43 4.99 5.45 63.45 24.21
7 `100-500 Crore 763 16.55 15.73 16.86 65.52 24.55
8 Greater than `500 Crore 239 57.92 54.36 54.28 64.72 22.59
9 All Sample Companies 459270 100.00 100.00 100.00 68.96 24.10
Table 2 profiles the sample companies across effective tax rates. 2,46,213 companies with average effective tax rate of less
than zero, zero and zero to 20 per cent accounted for 41.85 per cent of total profits before taxes, 20.31 per cent of total taxable
income and 25.74 per cent of total taxes paid. 42, 087 companies accounting for 11.45 per cent of total profits and 18.80 per cent
of the total taxes had an effective tax rate greater than the statutory rate. This is apparently on account of certain expenses debited
in profit and loss account being disallowable under the Income-tax Act.
Table 2: Profile of sample companies across range of effective tax rate*
(financial year 2010-11 [sample size – 459270 ]
Sl. Effective tax rate (in %) Number of Share in Total Share in Share in
No. Companies profits (in %) Total Total Tax
Income Payable
(in %) (in %)
1 Less Than Zero and Zero 176808 2.25 0.34 0.21
2 0-20 69405 39.60 19.97 25.53
3 20-25 16868 12.75 11.73 11.62
4 25-30 25652 16.73 20.00 18.97
5 30-33.21 97123 17.22 24.48 23.02
6 >33.21 42087 11.45 19.27 18.80
7 Indeterminate 31327 0 4.22 1.86
8 All Sample Companies 459270 100.00 100.00 100.00
* Effective tax rate is inclusive of surcharge and education cess.
2 The term "total income", in income-tax returns, represents taxable income i.e. the income as per books of accounts as adjusted by the
allowances and disallowances mandated under the Income-tax Act.
3 Effective tax rate in case of companies is the ratio of total taxes payable [including surcharge and education cess but excluding Dividend
Distribution Tax] to the total profits before taxes [PBT] and expressed as a percentage.
4 Effective tax rate including dividend distribution tax was 25.06 percent.23
Table 3 compares the effective tax rate of public sector companies [PSUs] with that of private sector companies. In a reversal
from previous years, the effective tax rate for private sector companies is slightly higher than that for public sector companies.
Table 3 : Effective tax rate* of sample companies in the public and private sectors
(financial year 2010-11) [sample size –459270 ]
Sl. Sector Number of Share in total Share in Effective
No. Companies profits (in %) total tax tax rate
payable (in %)
(in %)
1 Public 2113 21.95 20.30 22.28
2 Private 457157 78.05 79.70 24.61
Total 459270 100.00 100.00 24.10
* effective tax rate is inclusive of surcharge and education cess.
Table 4 shows a comparison between the effective tax rate of the manufacturing sector and the service sector in respect of the
sample companies. Both the sectors have an effective tax rate that is below the statutory rate of 33.21 per cent.
Table 4 : Effective tax rate* of sample companies in the manufacturing and service sectors
(financial year 2010-11) [sample size – 458696]
Sl. Sector Number of Share in total Share in Effective
No. Companies profits (in %) total tax tax rate
payable (in %)
(in %)
1 Manufacturing 121276 48.43 49.92 24.83
2 Service 337420 51.57 50.08 23.40
Total 458696 100.00 100.00 24.10
* Effective tax rate is inclusive of surcharge and education cess. Sample size is slightly less than the other tables as some of the returns did not
have the classification marked.
Table 5 gives details of the major tax expenditures on corporate tax payers in terms of the revenue forgone during the financial
year 2010-11 and 2011-12. The tax forgone on each tax concession claimed by these companies has been calculated by applying
the corporate tax rate of 33.21 per cent on the amount of each deduction. For revenue forgone on account of deduction/weighted
deduction for expenditure on scientific research and deduction for expenditure on eligible projects/schemes for social and economic
uplift of the public, it has been calculated by first determining the difference between the deduction debited to the profit and loss
account by companies and the deduction allowable under the Income-tax Act. Thereafter, the corporate tax rate of 33.21 per cent
has been applied to this difference to arrive at the revenue forgone figure.
Another aspect of revenue forgone is tax deferral. Tax deferral occurs when the taxpayer, on account of being allowed
higher deductions under the tax statute is able to defer his tax liability by claiming an allowance (e.g. depreciation allowance) as
a deduction over shorter time period whereas he may be spreading the same depreciation claim over a number of years in his own
accounts. As depreciation does not entail cash outgo, this is a tax deferral. On the other hand, the Minimum Alternate Tax (MAT)
on companies under the tax statute fastens a liability (for 2010-11, at the rate of 20% on book profits), on the profit reported by the
company to its shareholders (subject to some adjustments), if this liability is in excess of the tax liability computed at normal rates
(for 2010-11, at the rate of 33.21% on taxable income). The excess liability on account of MAT is allowed as a credit (for upto 10
years) in a subsequent year in which the normal tax liability is in excess of MAT. The additional tax paid on account of MAT is
therefore an advance payment of future tax liability. It restricts the period of deferral of taxes on account of claims of depreciation
and moderates the tax forgone on other deductions such as profit linked deductions by spreading the same claim over a longer
period of time.
Based on the revenue forgone figures for financial year 2010-11, the revenue forgone for the financial year 2011-12 has
been projected. The projection for 2011-12 has been made by multiplying the revenue forgone on each tax incentive in 2010-11
by the projected growth of corporate tax collections in 2011-12. Table 5, therefore, depicts the major tax expenditures on
corporate taxpayers in terms of tax forgone during the financial year 2010-11 and projection for financial year 2011-12.24
Table 5 : Major tax expenditure on corporate tax payers during
financial years 2010-11 and 2011-12 [sample size - 459270 ]
Sl. Nature of incentive Revenue Projected
No. Foregone Revenue
(in ` Crore) Foregone
[2010-11] (in ` Crore)
[2011-12]
1 Deduction of export profits of STPI units (section 10A) 7839 NIL*
2 Deduction of export profits of EHTP units (section 10A) 100 NIL*
3 Deduction of export profits of units located in SEZs (section 10A and 10AA) 7432 8153
4 Deduction of export profits of units located in EPZs (section 10A) 50 NIL*
5 Deduction of export profits of units located in FTZs (section 10A) 51 NIL*
6 Deduction of export profits of Export Oriented Units [EOUs] (section 10B) 3114 NIL*
7 Accelerated Depreciation (section 32) 33243 36468
8 Deduction/weighted deduction for expenditure on scientific
research (section 35 (1), (2AA) &(2AB)) 4685 5139
9 Deduction for expenditure on eligible projects or schemes for the
social and economic uplift of the public (section 35AC) 103 113
10 Deduction on account of donations to charitable trusts and
institutions (section 80G) 669 734
11 Deduction on account of donations for scientific research or
rural development (section 80GGA) 1 1
12 Deduction on account of contributions to political parties (section 80GGB) 6 7
13 Deduction of profits of certain industrial undertakings or a ship or a
hotel business (section 80-I) NIL Nil
14 Deduction of profits of undertakings engaged in development of
infrastructure facilities (section 80-IA) 3303 3623
15 Deduction of profits of undertakings engaged in development of SEZs
and Industrial Parks (section 80-IA) 345 378
16 Deduction of profits of undertakings engaged in providing telecommunication
services (section 80-IA) 2325 2550
17 Deduction of profits of undertakings engaged in generation, transmission
and distribution of power (section 80-IA) 7581 8316
18 Deduction of profits of undertaking engaged in revival of power plant (section 80-IA) 270 296
19 Deduction of profits of undertakings engaged in development of SEZs in
pursuance to SEZ Act, 2005 (section 80-IAB) 981 1076
20 Deduction of profits of industrial undertakings operating in the
small-scale sector (section 80-IB) 98 108
21 Deduction of profits of industrial undertakings located in
Jammu & Kashmir (section 80-IB) 209 229
22 Deduction of profits of industrial undertakings located in industrially
backward States other than Jammu & Kashmir (section 80-IB) 386 423
23 Deduction of profits of industrial undertakings located in
backward districts (section 80-IB) 65 71
24 Deduction of profits of industrial undertakings derived from multiplex
theatre and convention centre (section 80-IB) Nil Nil
25 Deduction of profits of industrial undertakings derived from development
of scientific research (section 80-IB) 73 8025
26 Deduction of profits of industrial undertakings derived from production
of mineral oil (section 80-IB) 3626 3978
27 Deduction of profits of industrial undertakings derived from housing
projects (section 80-IB) 928 1018
28 Deduction of profits of industrial undertakings derived from operating
a cold chain facility (section 80-IB) 3 3
29 Deduction of profits of industrial undertakings derived from integrated
business of handling, storage and transportation of food grains (section 80-IB) 28 31
30 Deduction of profits of industrial undertakings derived from processing,
preservation and packaging of fruits and vegetables (section 80-IB) 64 70
31 Deduction of profits of industrial undertakings derived from hospital
in rural area (section 80-IB) 8 9
32 Deduction of profits of undertakings set-up in North Eastern States (section 80-IC) 1055 1157
33 Deduction of profits of undertakings set-up in Sikkim (section 80-IC) 204 224
34 Deduction of profits of undertakings set-up in Uttaranchal (section 80-IC) 2726 2990
35 Deduction of profits of undertakings set-up in Himachal Pradesh (section 80-IC) 1650 1810
36 Deduction of profits from business of collecting and processing of
bio-degradable waste (section 80JJA) 41 45
37 Deduction in respect of employment of new workmen (section 80JJAA) 48 53
38 Deduction in respect of certain incomes of Offshore Banking Units [OBUs]
and International Financial Services Centre [IFSC] (section 80LA) 18 20
39 TOTAL 83328 79173
40 Less: Net additional tax liability on account of MAT
Additional tax liability on account of MAT: 29388
Less - Credit claimed for MAT payment made
in earlier years: 3972 25416 27881
41 NET REVENUE FORGONE 57912 51292
* The deduction has been phased out after 31.3.2011.
Across various sectors and activities, deductions for Software Technology Parks (STPs), Special Economic Zones (SEZs) and
the power sector and weighted deduction for expenditure on scientific research account for the major component of the total tax
forgone.
Revenue Forgone on export profits of units located in SEZs for financial year 2010-11 was projected at ` 5126 cores in the
previous year's statement. However, based on the data now available, the actual revenue forgone during 2010-11 on these units
is now estimated at ` 7432 crore. For financial year 2011-12, revenue forgone on account of these units has been estimated at
` 8153 crores. Keeping in mind the increase in revenue forgone in financial year 2010-11, the actual revenue forgone in financial
year 2011-12 in respect of units located in SEZs may be higher than the estimate.
The industry-wise distribution of effective tax rate of companies is given in the table in the Appendix to this statement. At the
lower range, the effective tax rate for Diamond cutting businesses and Software Development Agencies is at 19.32 per cent and
19.05 per cent respectively.
B. Non-Corporate [Firms/AOPs/BOIs] Sector
Apart from the corporate sector, large business is also organised as partnership firms and Association of Persons [AOPs] or
Body of Individuals [BOIs]. The tax expenditure on these is not as large as that in case of companies. The Income-tax Department
Sl. Nature of incentive Revenue Projected
No. Forgone Revenue
(in ` Crore) Forgone
[2010-11] (in ` Crore)
[2011-12]26
has received 5,02,141 returns filed electronically upto 31
st
December, 2011 for income of the financial year 2010-11. For the
purposes of estimating the tax expenditure, data pertaining to these 5,02,141 firms/AOPs/BOIs was culled out from the database
of the Income-tax Department. They account for a substantial part of the tax paid by the universe of firms/AOPs/BOIs in financial
year 2010-11.
The data was analysed and the following facts emerged:-
• The sample firms/AOPs/BOIs reported ` 70,880 crore as profits before taxes (losses were reported by about 8.63 per
cent of the sample) and declared a total income (taxable income) of ` 57,726 crore for the financial year 2010-11.
• These sample firms/AOPs/BOIs reported ` 17,134 crore as income tax payable [inclusive of education cess] for the
financial year 2010-11 . The effective tax rate
5
in their case works out to 24.17 per cent.
The tax forgone on each tax concession claimed by the sample firms/AOPs/BOIs has been calculated by applying the income
tax rate of 30.90 per cent on the amount of each deduction. The revenue forgone on account of accelerated depreciation,
deduction/weighted deduction for expenditure on scientific research and deduction for expenditure on eligible projects/schemes
for social and economic uplift of the public has been calculated by first determining the difference between the depreciation/
deduction debited to the profit and loss accounts by firms/AOPs/BOIs and the depreciation/deduction allowable under the Incometax Act. Thereafter, the income tax rate of 30.90 per cent has been applied to this difference to arrive at the revenue forgone figure.
Though the sample firms/AOPs/BOIs account for 90 per cent of all such entities in terms of taxes paid, the revenue forgone on
account of these sample firms/AOPs/BOIs has been taken to be the total revenue forgone in the non-corporate sector. To this
extent the revenue forgone may be a slight underestimate.
Based on the revenue forgone figures for financial year 2010-11, the revenue forgone for the financial year 2011-12 has
been estimated. The estimation for 2011-12 has been done by multiplying the revenue forgone on each tax incentive in 2010-11
by the projected growth in tax collections from firms/AOPs/BOIs in 2011-12. Table 6 depicts the major tax expenditures on noncorporate taxpayers in terms of revenue forgone during the financial years 2010-11 and 2011-12 . The highest tax expenditure,
by far, is from claims of deduction of profits of undertakings derived from Housing Projects which accounts for 31.59 % of the total
revenue forgone.
Table 6 : Major tax expenditure on sample firms/AOPs/BOIs during
financial years 2010-11 and 2011-12 [sample size – 502141]
Sl. Nature of incentive Revenue Projected
No. Forgone Revenue
(in ` Crore) Forgone
[2010-11] (in ` Crore)
[2011-12]
1 Deduction of export profits of STPI units (section 10A) 119 Nil*
2 Deduction of export profits of EHTP units (section 10A) Nil Nil*
3 Deduction of export profits of units located in SEZs (section 10A and 10AA) 354 412
4 Deduction of export profits of units located in EPZs (section 10A) 7 Nil*
5 Deduction of export profits of units located in FTZs (section 10A) 1 Nil*
6 Deduction of export profits of Export Oriented Units [EOUs] (section 10B) 358 Nil*
8 Accelerated Depreciation (section 32) 569 663
9 Deduction/weighted deduction for expenditure on scientific
research (section 35 (1), (2AA) &(2AB)) 6 7
10 Deduction for expenditure on eligible projects or schemes for the
social and economic uplift of the public (section 35AC) 26 30
11 Deduction on account of donations to charitable trusts and institutions (section 80G) 40 47
12 Deduction on account of donations for scientific research or rural
development (section 80GGA) Nil Nil
13 Deduction on account of contributions to political parties (section 80GGC) 1 1
14 Deduction of profits of certain industrial undertakings or a ship or a
hotel business (section 80-I) Nil Nil
5
Effective tax rate in case of firms/AOPs/BOIs is the ratio of total taxes payable [including education cess] to the total profits before taxes [PBT]
and expressed as a percentage.27
15 Deduction of profits of undertakings engaged in development of
infrastructure facilities (section 80-IA) 17 20
16 Deduction of profits of undertakings engaged in development of
SEZs and Industrial Parks (section 80-IA) 68 79
17 Deduction of profits of undertakings engaged in providing
telecommunication services (section 80-IA) 2 2
18 Deduction of profits of undertakings engaged in generation,
transmission and distribution of power (section 80-IA) 69 80
19 Deduction of profits of undertaking engaged in revival of power plant (section 80-IA) 3 3
20 Deduction of profits of undertakings engaged in development of SEZs
in pursuance to SEZ Act, 2005 (section 80-IAB) 8 9
21 Deduction of profits of industrial undertakings operating in
the small-scale sector (section 80-IB) 18 21
22 Deduction of profits of industrial undertakings located in
Jammu & Kashmir (section 80-IB) 63 73
23 Deduction of profits of industrial undertakings located in industrially
backward States other than Jammu & Kashmir (section 80-IB) 30 35
24 Deduction of profits of industrial undertakings located in
backward districts (section 80-IB) 10 12
25 Deduction of profits of industrial undertakings derived from multiplex
theatre and convention centre (section 80-IB) Nil Nil
26 Deduction of profits of industrial undertakings derived from development
of scientific research (section 80-IB) Nil Nil
27 Deduction of profits of industrial undertakings derived from
production of mineral oil (section 80-IB) Nil Nil
28 Deduction of profits of industrial undertakings derived from
housing projects (section 80-IB) 1950 2271
29 Deduction of profits of industrial undertakings derived from
operating a cold chain facility (section 80-IB) 1 1
30 Deduction of profits of industrial undertakings derived from
integrated business of handling, storage and transportation of food grains (section 80-IB) 3 3
31 Deduction of profits of industrial undertakings derived from processing,
preservation and packaging of fruits and vegetables (section 80-IB) 13 15
32 Deduction of profits of industrial undertakings derived from
hospital in rural area (section 80-IB) 3 3
33 Deduction of profits of undertakings set-up in North Eastern States (section 80-IC) 345 402
34 Deduction of profits of undertakings set-up in Sikkim (section 80-IC) 554 645
35 Deduction of profits of undertakings set-up in Uttaranchal (section 80-IC) 368 429
36 Deduction of profits of undertakings set-up in Himachal Pradesh (section 80-IC) 473 551
37 Deduction of profits from business of collecting and processing of
bio-degradable waste (section 80JJA) 8 9
38 Deduction in respect of certain incomes of Offshore Banking Units [OBUs]
and International Financial Services Centre [IFSC] (section 80LA) 1 1
39 Deduction of profits of cooperative societies (section 80P) 685 798
TOTAL 6173 6622
* The deduction has been phased out after 31.3.2011.
Sl. Nature of incentive Revenue Projected
No. Forgone Revenue
(in ` Crore) Forgone
[2010-11] (in ` Crore)
[2011-12]28
C. Individual Taxpayers
Chapter VI-A of the Income-tax Act primarily provides for deduction on certain payments; and deduction on certain incomes.
Individual taxpayers are eligible to claim these deductions and have a wide range of tax preferences available to them. However,
since 50 per cent of the individual taxpayers derive their income primarily from salaries, the profit-linked deductions [i.e. deduction
on certain business incomes] are not claimed by them. On the other hand, the group of non-salaried individuals claims both types
of deductions.
The estimates of revenue forgone on account of the various tax benefits granted to individual taxpayers is presented in Table
7. The revenue forgone under various sections of chapter VI-A of the Income-tax Act has been estimated on the basis of various
claims for tax preferences in the 68,62,807 returns filed electronically by individuals with the Income-tax Department till 31
st
December, 2011. Apart from chapter VI-A, the other major tax expenditure on individual taxpayers in the financial year 2010-11
was on account of the higher basic exemption limits for senior citizens (individuals aged 65 years or more) and women (other than
senior citizens).
Based on the figures of the sample of 68,62,807 returns of income, the revenue forgone for the entire population of tax payers
have been estimated as under:-
(i) The revenue forgone on account of higher basic exemption limits, as aforesaid (Sl. No. 22 and 23 of table 7), has been
calculated by multiplying the revenue forgone per senior citizen and per woman with their respective numbers. Their
respective numbers have been estimated by calculating the percentage of sample returns filed by them. Thereafter, this
percentage has been applied to the estimate of total number of individual taxpayers for financial year 2010-11. The total
sample returns filed electronically with the Income-tax Department till 31
st
December, 2011 is 68,62,807. The total
number of individual taxpayers for financial year 2010-11 is estimated to be 3,08,14,135 by assuming a growth rate of
5% over the estimate of the previous year which was 2,93,46,795. According to the sample returns, 5.53 per cent were
filed by senior citizens and 25.95 per cent of the balance returns were filed by women (other than senior citizens).
Further, the revenue forgone on account of a senior citizen and woman [who is not a senior citizen] has been calculated
by taking into account the difference between the higher basic exemption limits [` 2,40,000 and ` 1,90,000 respectively]
as compared to the general exemption limit of ` 1,60,000 and applying the lowest tax rate of 10% (plus cess) on the
difference. Thereafter, the revenue forgone on account of each such taxpayer has been projected on the total estimate of
the number of such tax payers.
(ii) Specifically, in the case of deduction under section 80-IA, 80-IAB, 80-IB and 80-IC (Sr. No. 12 to15 of table 7) the revenue
forgone has been calculated on the assumption that these figures reflect the total claims made by individuals under these
sections as all tax audited returns for income of F.Y. 2010-11 were subject to compulsory e-filing.
(iii) In all other cases, the revenue forgone for the entire population of taxpayers is worked out bya) First calculating the average revenue forgone for a particular incentive per taxpayer for each income slab which has
a separate tax rate in the sample returns.
(b) Secondly, multiplying this by the estimated total number of individual taxpayers in that income slab for financial year
2010-11.
This gives the revenue forgone for that income slab for a particular incentive. The sum of the revenue forgone for all the slabs
gives the revenue forgone for the entire population on account the particular tax incentive.
(iv) Based on the revenue forgone figures for financial year 2010-11, the revenue forgone during the financial year 2011-
12 has been estimated. This estimation has been done by multiplying the revenue forgone on each tax incentive in 2010-
11 by the projected growth in tax collections from individual taxpayers in 2011-12.
As detailed above, table 7 depicts the major tax expenditures on individual taxpayers in terms of revenue forgone during
financial years 2010-11 and 2011-12.
Table 7: Major tax expenditure on individual taxpayers during the
financial years 2010-11 and 2011-12
Sl. Nature of incentive/deduction Revenue Projected
No. Forgone Revenue
(in ` Crore) Forgone
[2010-11] (in ` Crore)
[2011-12]
1 Deduction on account of certain investments and payments (section 80C) 24359 28371
2 Deduction on account of contribution to certain pension funds (section 80CCC) 124 144
3 Deduction on account of contribution to the New Pension Scheme (section 80CCD) 18 21
4 Deduction on account of health insurance premium (section 80D) 579 67429
5 Deduction on account of expenditure for medical treatment of
a dependent who is disabled (section 80DD) 73 85
6 Deduction on account of expenditure for medical
treatment of specified diseases (section 80DDB) 27 32
7 Deduction on account of interest on loan taken for higher education (section 80E) 138 161
8 Deduction on account of donations to charitable trusts and institutions (section 80G) 288 335
9 Deduction on account of rent paid for housing accommodation (section 80GG) 70 81
10 Deduction on account of donations for scientific research or
rural development (section 80GGA) 70 81
11 Deduction on account of contributions given to political parties (section 80GGC) 7 8
12 Deduction of profits of undertakings engaged in development of
infrastructure facilities, SEZs and Industrial Parks, generation of power, and
providing telecommunication services (section 80-IA) 29 34
13 Deduction of profits of undertakings engaged in development of
SEZs in pursuance to SEZ Act, 2005 (section 80-IAB) 0 0
14 Deduction of profits of industrial undertakings derived from housing projects,
production of mineral oil, development of scientific research, integrated
business of handling, storage and transportation of food grains and of industrial
undertakings located in Jammu & Kashmir and in other backward
areas (section 80-IB) 223 260
15 Deduction of profits of undertakings set-up in North Eastern States,
Sikkim, Uttaranchal and Himachal Pradesh (section 80-IC) 288 335
16 Deduction of profits from business of collecting and processing
of bio-degradable waste (section 80JJA) 11 13
17 Deduction of professional income of authors of text books in
Indian languages (section 80QQA) Nil Nil
18 Deduction of royalty income of authors of certain books other
than text books (section 80QQB) 8 9
19 Deduction of royalty income on patents (section 80RRB) 0 0
20 Deduction in case of a person with disability (section 80U) 85 98
21 Deduction on account of certain investments in Infrastructure
Bonds (section 80CCF) 517 602
22 Higher exemption limit for senior citizens 1405 1636
23 Higher exemption limit for women 2334 2718
TOTAL 30653 35698
The tax expenditure on account of investments in various savings instruments, repayment of principal of housing loan and
payment of tuition fees for children [all these come under section 80C of the Income-tax Act] is the single largest tax expenditure in
case of individual taxpayers followed by deduction on account of health insurance premium (section 80D). The revenue forgone
on account of higher basic exemption limits for senior citizens and women are also significant. As regards profit-linked deductions,
the highest tax expenditures are on account of section 80-IB and section 80-IC of the Income-tax Act, 1961.
Sl. Nature of incentive/deduction Revenue Projected
No. Forgone Revenue
(in ` Crore) Forgone
[2010-11] (in ` Crore)
[2011-12]30
Indirect Taxes
A. Excise duties
Excise duty is levied as per the rates specified in the First and Second Schedules to the Central Excise Tariff Act, 1985. In
many cases, the various Finance Acts specify the rates at which these duties should be levied. The rates specified in various
enactments are known as the "tariff rates" of excise duty. Central Government has been granted powers under Section 5A(1) of
the Central Excise Act, 1944 to issue exemption notifications in public interest so as to prescribe duty rates lower than the tariff
rates prescribed in the Schedules. The rates prescribed by exemption notifications are known as the "effective rates".
Revenue forgone is defined to be the difference between duty that would have been payable but for the issue of the
exemption notification and the actual duty paid in terms of the relevant notification –
• In cases where the tariff and effective rates of duty are specified as ad valorem rates,-Revenue forgone= Value of goods
X (Tariff rate of duty - Effective rate of duty)
• In cases where the tariff rate is on ad valorem basis but the effective duty is levied at specific rates under the terms of
exemption notification, then – Revenue forgone= (Value of goods X Tariff rate of duty) - (Quantity of goods X Effective
rate of specific duty)
• In cases where the tariff rates and effective rates are a combination of ad valorem and specific rates, revenue forgone is
calculated accordingly
• In all the above cases, if the tariff rate of duty equals the effective rate, revenue forgone will be zero.
Besides the powers to issue general exemption notifications under Section 5A(1) ibid, the Central Government also has
the powers to issue special orders for granting excise duty exemption on case to case basis under circumstances of an exceptional
nature, vide Section 5A(2) of the Central Excise Act. However, unlike general exemptions which form part and parcel of fiscal
policy of the Central Government, the main object behind issue of exemption orders is to deal with circumstances of exceptional
nature. As such, the duty forgone on account of issue of special exemption orders is not being calculated towards revenue forgone
figures.
Automation of Central Excise & Service Tax (ACES) system has been launched in all the Central Excise formations
across the country. The revised figure of duty forgone for 2010-11 is based on ACES data, which, among other thing, enables
capture of data contained in returns filed by assesses. As the actual figures for revenue realization are now available for the whole
year, revised revenue forgone figure has been worked out accordingly. The duty forgone due to the operation of area based
exemptions scheme has been obtained separately from the concerned Central Excise zones and added. In the last Budget, the
revenue forgone estimate for the financial year 2010-11 was calculated using the extrapolation method based on data for part of
the year i.e. April-November, 2010. Accordingly, the revenue forgone for the financial year 2010-11was estimated at ` 1, 98,291
crore [` 1, 87,041 crore + ` 11,250 crore (towards area based exemption)]. The revised revenue forgone for the financial year
2010-11based on actual data for the full year comes to ` 1, 92,227 crore as against the estimates of ` 1, 98,291 crore.
As in the past, the revenue forgone for the current financial year i.e. 2011-12 has also been estimated using the
extrapolation method based on ACES data for part of the year i.e. April-December, 2011. Accordingly, the revenue forgone for the
financial year 2011-12 is estimated at ` 2, 12,167 crore including ` 12,880 crore on account of area based exemptions.
The estimates of ` 2,12,167 crore show an increase of about 10.37% over last year's corresponding revised figure of
`1,92,227 crore. The revenue forgone has increased compared to that registered in 2010-11, because in 2010-11 the excise duty
on unbranded Diesel continued to be charged at the rate of ` 2.60 per litre respectively, whereas with effect from 25
th
June 2011,
unbranded Diesel was fully exempted from excise duty resulting in significant increase in duty forgone significantly. Further, the
excise duty collections have increased in the current financial year by about 6.8% till January, 2012 compared to similar period in
2010-11. The increase in revenue forgone has been partially offset on account of levy of central excise duty of 1% (if no CENVAT
is availed) and 5% (if CENVAT on inputs is availed) on 130 items, which were exempt from central excise duty as also levy of
compulsory excise duty @ 10% on ready- made garments with effect from 01.03.2011.
As for area-based exemptions, there are two types of schemes currently in operation - [i] based on refunds and [ii] outright
exemption as in the case of Himachal Pradesh and Uttarakhand. In the case of refund-based exemptions, the revenue forgone is
computed by aggregating the refunds actually sanctioned to the individual units or claimed by them during the year. With an
increase in clearances, it is evident that the quantum of refunds would increase. As for outright exemptions, the revenue forgone
is calculated using the difference between the general effective rate and the duty actually paid (Nil). By the same logic, therefore,
the revenue forgone in respect of the exemption schemes also reflects the upward trend.31
The revenue forgone figures are given in Table 8 below.
Table 8 : Tax expenditure under Excise duty regime
Sl. Details of Exemption Revenue forgone (in crore)
No. 2010-11 2011-12
Estimates Revised Estimates
1 Area based exemptions applicable in the North Eastern states,
Uttaranchal, Himachal Pradesh, Jammu & Kashmir and
Kutch district of Gujarat 11250 10246 12880
2 Others 187041 181981 199287
Total 198291 192227 212167
B. Customs duties
Customs duty is levied under Customs Act, 1962 as per the rates specified in the First Schedule to the Customs Tariff Act,
1975 known as "tariff rates". The Customs Tariff Act, 1975 also provides for levy of (i) additional duty of customs (commonly
referred to as countervailing duty or CV duty), which is levied at a rate equal to the duties of excise leviable on like goods if they
were manufactured in India and (ii) special additional duty of customs (commonly referred to as Special CVD or SAD) which is
levied at a rate of 4%. Duties of excise are levied under the Central Excise Act as per the rates specified in the Schedule to the
Central Excise Tariff Act, 1985 and various Finance Acts. The Central Government has been delegated powers of exemption
under Section 25(1) of the Customs Act, 1962 to issue notifications in public interest so as to prescribe duty rates lower than the
tariff rates prescribed in the Schedule to the Customs Tariff Act. These rates prescribed by notification are known as the "effective
rates".
The revenue forgone is thus defined to be the difference between duty that would have been payable but for the issue of the
exemption notification and the actual duty paid in terms of the relevant notification. In other words,
Revenue forgone= Value X (Tariff rate of duty – Effective rate of duty)
Thus, if the tariff rate equals the effective rate, revenue forgone is zero.
The estimate of revenue forgone under various exemption notifications is based on the data generated from the Bills of Entry
filed in the Indian Customs Electronic Data Interchange System (ICES) at various Electronic Data Interchange (EDI) locations.
However, since the EDI system does not capture data in respect of imports through such ports, ICDs & CFSs where either EDI
system has not become fully functional or where filing of Bills of Entry is still happening manually, the EDI data does not provide
a complete picture of the customs revenue forgone. Suitable adjustments (mainly additions) are made to EDI data in order to
include revenue forgone on account of bulk imports or transactions cleared in the manual mode. The revenue forgone data takes
into account the exemptions from basic customs duty, CV duty and also exemption notifications issued under Central Excise Act,
1944 which are relevant for levy of CV duty. It also takes into account exemptions from special CVD of 4%.
For the year 2010-11, gross customs revenue captured by EDI data was ` 107624 crore as against actual gross customs
revenue collection of ` 135780 crore. Thus, the EDI captured nearly 80% of the actual reported gross customs revenue collection
for the year 2010-11. This implies that the estimation of revenue forgone is based on a fairly large and representative data base.
In order to work out the revenue forgone for the year 2010-11, EDI data has been adjusted upward both for completing
coverage as well as fully capture revenue on account of edible oils, minerals and ores and petroleum products/ crude petroleum,
which are normally imported as bulk cargo through Customs locations, some of which are still not on EDI.
The total revenue realized as per the EDI data for the year 2010-11 is `107624 crore, however the gross customs revenue for
the year was ` 135780 crore indicating a coverage of 80%. The total Revenue forgone as generated from the EDI system comes
to `184105 crore. After suitable adjustments made for coverage and bulk cargo (not on EDI), duty forgone for the year 2010-11
on account of all the exemption notifications comes to ` 230131 crore as against the estimated duty forgone of ` 228500 crore
published last year. Further, after deducting the revenue forgone from the various export promotion schemes (other than drawback)
and the category of incentive schemes mentioned at Sr. no. 14 of the Table 11 below, the net duty forgone for the year 2010-11
works out to ` 172740 crore.
In order to work out the estimated revenue forgone for the year 2011-12 (estimated), the same methodology was adopted.
The EDI captured nearly 94% of the actual reported gross customs revenue collection this year indicating much improved EDI
coverage. The EDI revenue forgone figures for the period April 2011-January 2012 were extrapolated for 12 months to ` 27609332
crore, yielding an increase in revenue forgone by 20% over the previous year. Further, after deducting the revenue forgone from
the various export promotion schemes (other than drawback) and the category of incentive schemes mentioned at Sr. no. 14 of the
Table 11 below, the net duty forgone (Estimated )for the year 2011-12 works out to ` 223653 crore.
The revenue forgone has increased compared to that registered in 2010-11 (20% more than the previous year) because in
2010-11 the effective basic customs duty on crude petroleum oil, Petrol and Diesel continued to be charged at 5%, 7.5 % and 7.5%
respectively, whereas from 25
th
June 2011, the effective basic Customs duty for the same was reduced to Nil, 2.5% and 2.5 %
respectively. Thus for the remaining financial year since 25
th
June, 2011, the duty forgone amount has increased significantly.
Further, the base for collection of Customs duty (i.e. the aggregate value/volume of imports) has also increased in the current
financial year as evident from 12% increase in the customs duty collections till January, 2012 compared to similar period in last
financial year 2010-11.
The customs duty forgone for the period 2010-11 and 2011-12 on account of major commodity groups and their share in
overall duty forgone is given in Table 9 as under:
Table 9: Contribution of major commodity groups contributing to revenue foregone
(in ` crore)
Sector 2010-11 2011-12 (Estimated)
Revenue % Share in total Revenue % Share in total
forgone revenue forgone forgone revenue forgone
Crude oil and mineral oils (27) 41200 18 58190 21
Machinery (84& 85) 25137 10 29979 11
Diamond and gold (71) 49164 21.50 57063 20.75
Edible vegetable, fruits, cereals,
vegetable oils (7, 8, 10, 15) 27928 12.75 32682 12
Primary metals and articles
thereof (72 to 83) 12768 5 14747 5.50
Chemicals and plastics (28, 29, 39) 18168 7.50 18395 6.75
Textile (50 TO 63) 11393 5.25 12370 4.50
Fertilizer 6039 3 8927 3.25
Salt and ores (25 TO 26) 7249 3.25 8785 3.25
Drugs 3041 1.25 1611 .60
Total 201166 87.50 242759 88
The revenue foregone data for each of the chapters of Customs Tariff Act is given in Table 10 as under:
Table 10: Estimates of major tax expenditure under the Customs duty regime
(` in Crore)
Chapter Brief Description of Goods 2010-11 2011-12
(Estimated)
1 Live animals 2 4
2 Meat and edible meat offal 4 5
3 Fish and crustaceans, other aquatic invertebrates 27 40
4 Dairy Products 465 648
5 Other products of animal origin 57 73
6 Live trees and other plants 6 7
7 Edible vegetables, certain roots and tubers 3885 4676
8 Edible fruit and nuts 1968 2733
9 Coffee, tea, mate and spices 756 85233
10 Cereals 507 106
11 Products of the milling industry 38 28
12 Oilseeds, grains, seeds, fruits 271 289
13 Lac, gums and resins 179 140
14 Vegetable plaiting materials 1 5
15 Animal of vegetable fats 21568 25167
16 Preparations of meat or fish 12 20
17 Sugar 2330 667
18 Cocoa 182 251
19 Preparations of cereals 39 39
20 Preparation of vegetables 58 81
21 Miscellaneous edible preparations 406 502
22 Beverages and spirits 237 182
23 Residues and waste from food industry 268 281
24 Tobacco 71 65
25 Salt, sulphur earths and stone 539 914
26 Ores 6710 7871
27 Mineral fuels and mineral oils 41200 58190
28 Inorganic chemicals 2903 3902
29 Organic chemicals 11713 10579
30 Pharmaceutical products 3041 1611
31 Fertilizers 6039 8927
32 Tanning and dyeing extracts, pigments 492 570
33 Essential oils 395 417
34 Soap and washing preparations 168 218
35 Albuminoidal substances 182 200
36 Explosives, matches 11 5
37 Photography goods 93 107
38 Miscellaneous chemical products 1768 2204
39 Plastics 3552 3915
40 Rubber 2192 2580
41 Hide and skins and leather 378 357
42 Articles of leather 50 66
43 Fur skins 3 4
44 Wood 1118 1341
45 Cork 1 2
46 Manufactures of straw 0 1
47 Wood Pulp 621 773
48 Paper 1716 1795
(`in Crore)
Chapter Brief Description of Goods 2010-11 2011-12
(Estimated)34
49 Printed books, newspapers 476 562
50 Silk 512 535
51 Wool 434 467
52 Cotton 1994 889
53 Other vegetable fibres 89 102
54 Manmade filaments 4052 5337
55 Man made staple fibres 590 695
56 Wadding and non wovens 50 50
57 Carpets 30 31
58 Special woven fabrics 2396 3279
59 Coated textile fabrics 717 657
60 Knitted fabrics 309 265
61 Knitted readymade garments 66 63
62 Woven garments 95 110
63 Made ups 59 100
64 Footwear 205 236
65 Head gear 4 3
66 Umbrellas 13 17
67 Feathers/artificial flowers 14 4
68 Articles of stone, plaster 136 146
69 Ceramic Products 366 546
70 Glass and glass ware 201 198
71 Precious stones, jewellery 49164 57063
72 Iron and steel 7615 8560
73 Articles of iron and steel 2168 2626
74 Copper and articles thereof 690 1045
75 Nickel and articles thereof 238 273
76 Aluminum and articles thereof 969 1148
78 Lead and articles thereof 270 252
79 Zinc and articles thereof 96 90
80 Tin and articles thereof 77 84
81 Other base metals 93 123
82 Tools and implements 390 359
83 Miscellaneous articles of base metals 162 186
84 Machinery 14298 16792
85 Electrical machinery 10839 13187
86 Railways or tramways locomotives, rolling stocks etc. 116 103
87 Motor vehicles 3068 4209
88 Aircrafts 1869 2438
(`in Crore)
Chapter Brief Description of Goods 2010-11 2011-12
(Estimated)35
89 Ships, boats and floating structures 2289 4185
90 Optical/photographic instruments 2958 3138
91 Clocks and watches 69 78
92 Musical instruments 9 6
93 Arms and ammunitions 306 1031
94 Furniture 328 301
95 Toys and games 263 226
96 Miscellaneous manufactured articles 192 191
97 Work of art, antiques 29 93
98 Project imports, baggage 536 603
Total 230131 276093
These figures include revenue forgone from the working of various export promotion schemes other than from drawback. The
break-up of revenue forgone from individual export promotion schemes is given below, separately. Out of these schemes, Duty Free
Entitlement Credit Certificate, Target Plus, Vishesh Krishi and Gram Udyog Yojana (VKGUY), Served from India and Focus Market
are incentive schemes. The remaining are either exemption schemes or input tax neutralization schemes, which primarily accord
input tax credit so as to offer a level playing field to our exporters in the international markets. In this sense, the revenue forgone from
the various export promotion schemes (other than drawback) needs to be scaled down by the amount of revenue forgone from the
various export promotions schemes falling in the category of incentive schemes. Sr. no. 15 of the Table 11 hereunder tabulates the
amount of such revenue forgone.
Table 11: Revenue Forgone on account of Export Promotion Concessions
( in Crore)
S. No. Name of the Scheme 2010-11 2011-12
(Estimated)
1 Advance Licence Scheme 19355.28 21035
2 EOU/EHT/STP 8579.87 4213.57
3 EPCG 10621.24 9580.36
4 DEPB Scheme 8756.55 11103.30
5 SEZ 8630.16 5313.60
6 DFRC 43.53 29.22
7 Duty Free Import Authorisation Scheme 1404 1165.32
8 Duty Free Entitlement Credit Certificate 156.39 167.53
9 Target plus schemes 374 1047.20
10 Vishesh Krishi and Gram Udyog Yojana 1788.48 2021
11 Served from India Scheme 542 322.65
12 Focus Market/Product Sheme 1757.50 3146.41
13 TOTAL 62009 59145
14 Less revenue forgone on incentive schemes mainatined at S.Nos. 8 to 12 4618.37 6704.79
15 Revenue Forgone on account of input tax neutralisation or exemption schemes
to be reduced from gross revenue forgone on account of customs duty 57390.63 52440.21
(` in Crore)
Chapter Brief Description of Goods 2010-11 2011-12
(Estimated)36
These aforesaid estimates of revenue forgone do not include revenue forgone on account of ad hoc exemption
orders issued under Section 25(2) of the Customs Act, 1962, that relate to circumstances of an exceptional nature.
The revenue forgone for Direct and Indirect Taxes are given in Table 12 and 13 below:
Table 12: Revenue Forgone (Direct Taxes) in financial years 2010-11 and 2011-12
(in Crore)
Revenue Forgone Projected Revenue Forgone
in 2010-11 in 2011-12
Corporate Income-tax 57912 51292
Personal Income-tax 36826 42320
Total 94738 93612
Table 13: Revenue Forgone (Indirect Taxes) in financial years 2010-11 and 2011-12
(in Crore)
Revenue Forgone Actual tax Revenue Forgone Estimated tax
in 2010-11 collection in 2010-11 in 2011-12(Estimated) collection in 2011-12
Excise Duty 192227 139744 212167 146000
Customs duty* 172740 135780 223653 153000
* Custom duty less export credit related (Sl. No. 15 of table 11)
APPENDIX
Effective tax rate, inclusive of surcharge and education cess, of sample companies across industry
(financial year 2010-11) [sample size – 458696]
Sl. Sector Industry Number of Profit Total tax Effective
No Companies before tax payable tax rate
(in ` crore) (in ` crore) (in %)
1 Manufacturing Agro-based Industries 11356 8169 1958 23.98
2 Manufacturing Automobile and Auto parts 4075 34796 9209 26.46
3 Manufacturing Cement 689 5597 1230 21.98
4 Manufacturing Diamond Cutting 423 1653 319 19.32
5 Manufacturing Drugs and Pharmaceuticals 4965 38612 8213 21.27
6 Manufacturing Electronics, including
Computer Hardware 2517 7143 1736 24.30
7 Manufacturing Engineering goods 9400 35479 10704 30.17
8 Manufacturing Fertilizers, Chemicals and Paints 3660 15488 4226 27.29
9 Manufacturing Flour and Rice Mills 1285 797 233 29.21
10 Manufacturing Food Processing Units 2472 5447 1422 26.11
11 Manufacturing Marble and Granite 1879 970 281 28.93
12 Manufacturing Paper 1439 1719 386 22.48
13 Manufacturing Petroleum and Petrochemicals 657 41186 9560 23.21
14 Manufacturing Power and Energy 4107 79345 17512 22.07
15 Manufacturing Printing and Publishing 2493 4165 1229 29.5137
16 Manufacturing Rubber 891 736 188 25.61
17 Manufacturing Steel 4675 29839 8163 27.36
18 Manufacturing Sugar 292 1919 504 26.25
19 Manufacturing Tea and Coffee 910 1493 197 13.19
20 Manufacturing Textiles, Handlooms and Powerlooms 9067 13003 2701 20.77
21 Manufacturing Tobacco 291 877 259 29.49
22 Manufacturing Tyre 144 1721 490 28.50
23 Manufacturing Vanaspati and Edible Oils 623 1104 284 25.71
24 Manufacturing Others 52966 127190 32839 25.82
25 Trading Chain Stores 757 573 156 27.33
26 Trading Retailers 10523 5235 1536 29.34
27 Trading Wholesalers 18131 7075 2140 30.24
28 Trading Others 68129 54927 11615 21.15
29 Commission Agents General Commission Agents 4154 1285 377 29.34
30 Builders Builders 14754 6106 1436 23.52
31 Builders Estate Agents 2769 349 113 32.54
32 Builders Property Developers 23821 18065 3680 20.37
33 Builders Others 17390 6199 1419 22.89
34 Contractors Civil Contractors 8298 13999 3854 27.53
35 Contractors Excise Contractors 21 7 2 32.21
36 Contractors Forest Contractors 12 2 0 9.68
37 Contractors Mining Contractors 692 2509 810 32.29
38 Contractors Others 8451 11243 2749 24.45
39 Professionals Chartered Accountants, Auditors, etc. 66 5 2 33.21
40 Professionals Fashion Designers 93 44 10 22.11
41 Professionals Legal Professionals 248 29 8 28.81
42 Professionals Medical professionals 1218 210 61 29.26
43 Professionals Nursing Homes 924 151 43 28.24
44 Professionals Specialty Hospitals 917 1099 272 24.78
45 Professionals Others 5454 1072 330 30.79
46 Service Advertisement Agencies 2423 1383 421 30.47
47 Service Beauty Parlours 192 41 14 35.40
48 Service Consultancy Services 13366 11116 2430 21.86
49 Service Courier Agencies 416 474 176 37.06
50 Service Computer Training, Educational
and Coaching Institutes 2453 1075 265 24.69
51 Service Forex Dealers 638 235 67 28.34
52 Service Hospitality Services 3299 1453 346 23.80
Sl. Sector Industry Number of Profit Total tax Effective
No Companies before tax payable tax rate
(in ` crore) (in ` crore) (in %)38
Sl. Sector Industry Number of Profit Total tax Effective
No Companies before tax payable tax rate
(in ` crore) (in ` crore) (in %)
53 Service Hotels 6067 12410 3098 24.96
54 Service IT Enabled Services, BPO
Service Providers 8648 17978 3836 21.34
55 Service Security Agencies 1278 429 153 35.68
56 Service Software Development Agencies 9661 41491 7904 19.05
57 Service Transporters 3683 5629 1247 22.16
58 Service Travel Agents and Tour Operators 3353 1002 280 27.94
59 Service Others 49444 53749 13063 24.30
60 Financial Service Banking Companies 290 102820 25351 24.66
61 Financial Service Chit Funds 2167 318 101 31.71
62 Financial Service Financial Institutions 321 12746 3151 24.72
63 Financial Service Financial Service Providers 2906 5796 1594 27.50
64 Financial Service Leasing Companies 557 1221 268 21.94
65 Financial Service Money Lenders 445 115 32 27.54
66 Financial Service Non-Banking Financial Companies 8269 27758 7162 25.80
67 Financial Service Share Brokers, Sub-brokers, etc. 3951 4849 1488 30.68
68 Financial Service Others 20213 46843 8984 19.18
69 Entertainment Industry Cable T.V Productions 315 141 42 29.51
70 Entertainment Industry Film Distribution 319 1079 216 19.99
71 Entertainment Industry Film Laboratories 27 73 7 10.05
72 Entertainment Industry Motion Picture Producers 461 287 71 24.80
73 Entertainment Industry Television Channels 348 2290 738 32.21
74 Entertainment Industry Others 5088 3143 1100 34.99
Total 458696 946576 228061 24.09
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