Last week, the Government of India's revenue department did something new and interesting--it released a range of aggregated tax data. The data included an overview of direct tax from the years 2000-01 to 2014-15, a little bit of PAN allotment data, and an analysis of returns for the assessment year 2012-13. Although the data release was accompanied by grandiose statements about transparency, it will amount to such only if the data releases continue regularly.
The time series data interesting, but of limited use because it's inadequately cross-tabulated. So, for example, you can see the corporate and individual tax split for each year, and you can see the statewise split for each year, you don't have a split across both. That means that you can see that Maharashtra's share is the highest and getting even higher but you can't tell what role does corporate and individual tax plays in this.
Still, there's one very interesting tidbit in the data that analyses income tax returns about types of tax. For the set of returns analysed here, the total long-term capital gains tax that assesses across the country earned was ₹70,121 crore. However the equivalent number for short-term capital gains was, guess what? It was a loss of ₹10,558 crore. At the same time, the total for interest income was ₹85,591 crore. Amazingly, 91 per cent (₹63,864 crore) of the long-term capital gains tax came from the top 1,240 assessees.
These income numbers perfectly sum up the investment situation in the country. We're largely a fixed-income country, and capital-gains bearing investments are mostly limited to a tiny sliver of the very rich. What's much more instructive is the contrast between long-term capital gains and short-term capital losses. Even though this is based on limited data--a situation one hopes will get remedied--it does suggest that long term investments make money while short-term investments make losses.
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