Revenue foregone to corporates estimated at Rs 99,842.06 cr in 2019-20

Revenue foregone to corporates estimated at Rs 99,842.06 cr in 2019-20

The government’s revenue foregone in the form of incentives and tax exemptions to corporates in 2019-20 fell 7.65 per cent to Rs 99,842.06 crore, according to the Budget 2021 document.

The revenue foregone stood at Rs 1,08,113.04 crore in 2018-19.

Though the revenue impact has been quantified in terms of tax expenditure, it does not imply that this quantum of revenue has been waived by the government.

“Rather, these could be seen as targeted expenditure for promotion of certain sectors,” the Budget document said.

In a chapter titled ‘Statement of Revenue Impact of Tax Incentives under the Central Tax System: Financial Years 2018-19 and 2019-20’, the document said revenue foregone on account of ‘accelerated depreciation’ was to the tune of Rs 50,251.56 crore in 2019-20.

Companies take advantage of various concessions to reduce tax liability, while individuals park their funds in tax savings scheme to cut tax burden.

Revenue foregone on deduction of profits of undertakings engaged in generation, transmission and distribution of power was to tune of Rs 14,326.23 crore in 2019-20, compared to Rs 15,513.02 crore in 2018-19, it said.

Similarly, revenue foregone on deductions of profit of industrial undertakings derived from production of mineral oil and natural gas stood at Rs 1,418.12 crore in 2019-20.

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