Trend of tax collection in India

  • The tax-to-GDP ratio is the ratio of tax collected compared to national gross domestic product (GDP). The 2016 Economic Survey said that India’s tax to GDP ratio is 16.6 percent, which is much lower than the emerging market economy average of 21 percent and OECD average of 34 percent.
  • India has one direct taxpayer for every 16 voters.
  • Only 1% of India’s population pays income tax.
  • India’s direct to indirect tax ratio is roughly 35:65. This is in contrast to most OECD economies where the ratio is the exact opposite, 67:33 in favor of direct taxes.