Tax data shows how Covid-19 crushed small companies while big ones made hay

Listed firms paid Rs 35,000 cr more tax this year, even as corporate tax mop up fell by Rs 1 trn. Pvt ltd firms and the non-corporate sector paid Rs 1.35 trn less, which means their profits dived

The pandemic and the lockdowns lopped off three per cent of India’s economy in nominal terms in 2020-21, affecting the government’s tax collection. Personal income tax revenue fell commensurately by two per cent, but revenue from corporation tax, levied on company profits, fell much more, by 18 per cent.

This would generally give the impression that companies like Reliance Industries, Tata Consultancy Services, Bajaj Finance and HDFC Bank, which are among the biggest corporate taxpayers, bore the brunt of the slowdown and paid less tax in FY21 as their profits were badly impacted.

But the reality is otherwise.

Two pieces