According to data in the Income Tax Return Statistics AY 2012-13, in 2012-13, the “Number of Effective Assessees” was 4,72,67,582. If these black incomes were caught, then 200 per cent of the GDP would have accrued as tax collection whereas today, only 5.5 per cent of the GDP is collected as direct tax. That would mean a GDP contribution of about Rs 21 lakh crore out of Rs 150 lakh crore. Collecting this tiny bit of tax would be horrendously difficult for a variety of reasons, including definitional and administrative ones, so that cost may not justify the likely tax collections. It is not that if agricultural incomes are not taxed, there is no tax on such incomes.

Source: Indian Express June 13, 2017 18:30 UTC