Lok Sabha Question No. 1184 (UNSTARRED), answered on 2025-07-28
Subject: Revenue Loss due to Tax Exemptions/Deductions
Ministry: FINANCE
Asked by: Shri Tanuj Punia, Shri Balwant Baswant Wankhade, Shri Charanjit Singh Channi

Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 1184

TO BE ANSWERED ON MONDAY, JULY 28, 2025/SRAVANA 6, 1947 (SAKA)

## REVENUE LOSS DUE TO TAX EXEMPTIONS/DEDUCTIONS

1184. SHRI CHARANJIT SINGH CHANNI:

SHRI TANUJ PUNIA:

SHRI BALWANT BASWANT WANKHADE:

Will the Minister of FINANCE be pleased to state:

- (a) the total revenue loss on account of tax exemptions, deductions, and incentives extended to corporate and other categories of taxpayers under various heads since Financial Year 2019, category-wise;
- (b)  the  sector-wise  and  industry-wise  details  of  revenue  loss  during  the  said  period, particularly in high-incentive sectors such as infrastructure, manufacturing, IT, and renewable energy;
- (c)  whether  the  Government  has  reviewed  the  impact  of  these  tax  incentives  in  terms  of employment generation, capital investment, wage growth, innovation or regional development; and
- (d)  if  so,  the  details  thereof  and  the  corrective  measures  proposed  to  be  taken  by  the Government in this regard?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (b): Total Revenue loss on account of tax exemptions, deductions and incentives in respect of Direct Taxes:

| Revenue Forgone from F.Y 2019-20 to 2023-24 (Direct Taxes)   | Revenue Forgone from F.Y 2019-20 to 2023-24 (Direct Taxes)   | Revenue Forgone from F.Y 2019-20 to 2023-24 (Direct Taxes)              | Revenue Forgone from F.Y 2019-20 to 2023-24 (Direct Taxes)   | Revenue Forgone from F.Y 2019-20 to 2023-24 (Direct Taxes)   |
|--------------------------------------------------------------|--------------------------------------------------------------|-------------------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|
| Financial Year                                               | Major Tax Incentives for Corporate Taxpayers (A)             | Major Tax Incentives for Non- Corporate Taxpayers (Firms/AOPs/BOIs) (B) | Major Tax Incentives for Individual HUF Taxpayers (C)        | (In Rs. Crore) Grand Total (A+B+C)                           |
| 2019-20                                                      | 94109.83                                                     | 8,043.07                                                                | 1,55,429.45                                                  | 2,57,582.35                                                  |
| 2020-21                                                      | 75,218.02                                                    | 7,731.61                                                                | 1,28,244.23                                                  | 2,11,193.86                                                  |
| 2021-22                                                      | 96,892.39                                                    | 9,018.68                                                                | 1,68,566.30                                                  | 2,74,477.37                                                  |
| 2022-23                                                      | 88,109.27                                                    | 10,920.83                                                               | 1,96,678.95                                                  | 2,95,709.05                                                  |
| 2023-24 (Projected)                                          | 98,999.57                                                    | 12,270.64                                                               | 2,20,988.47                                                  | 3,32,258.68                                                  |

Total Revenue loss on account of tax exemptions, deductions and incentives in respect of Indirect Taxes:

| Revenue impact of tax incentives (Indirect Taxes) (In Rs. Crore)   | Revenue impact of tax incentives (Indirect Taxes) (In Rs. Crore)   | Revenue impact of tax incentives (Indirect Taxes) (In Rs. Crore)   |
|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|
| Year                                                               | Customs                                                            | Total                                                              |
| 2019-20                                                            | 79,114                                                             | 79,114                                                             |
| 2020-21                                                            | 62,773                                                             | 62,773                                                             |
| 2021-22                                                            | 37,680                                                             | 37,680                                                             |
| 2022-23                                                            | 33,986                                                             | 33,986                                                             |
| 2023-24                                                            | 37,252                                                             | 37,252                                                             |

(c) & (d): No such review has been carried out. Phasing out the exemptions and incentives available  to  various  taxpayers  and  simplifying  the  tax  structure  is  the  stated  policy  of  the Government. Starting from the Finance Act, 2016, the corporate tax rates have been gradually reduced.    Vide  Taxation  Laws  (Amendment)  Act,  2019,  an  option  has  been  provided  to corporates to pay tax at concessional rate of 22% if they do not avail specified deductions or incentives.

Taxation  rates,  exemptions  and  tax  incentives  in  terms  of  employment  generation, capital  investment,  wage  growth,  innovation  or  regional  development  are  part  of  the  overall fiscal policy of the Government which aims at holistic growth of the economy.

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