Direct tax collection for the April-January period grew by 19.3% to Rs 6.95 lakh crore against the required 18.3% growth for the full year to meet the revised estimate target of Rs 10.05 lakh crore in the current fiscal, the government said on Friday. In the Budget presented earlier this month, the government revised the direct tax collection target upwards from Rs 8.5 lakh crore. For the 10 months of the fiscal, net collections for corporate income tax (CIT) grew by 19.2% while the personal income tax (PIT) mop-up rose by 18.6%. The government said that refunds amounting to Rs 1.26 lakh crore have been issued during this period. Experts attributed collection growth to formalisation of the economy as a result of demonetisation and roll-out of the new indirect tax regime GST.
“This (demonetisation and GST) has led to the hitherto informal income coming into formal economy and thereby resulting in higher tax collection. One can expect this trend to continue,” Daksha Baxi, executive director, Khaitan & Co, said. The direct tax collection growth had slowed down to just over 14% for the April-November period but picked up in the subsequent months.
