The Centre’s net direct tax collections stood at Rs 1,85,871 crore as on June 15 this fiscal, double the level in the year-ago period, thanks to a low base, a pick-up in exports, better compliance and lower refunds. Advance tax collections in the first quarter of FY22 were Rs 28,780 crore, up 146% on year, as the June 15 deadline passed.
Of course, as the chart shows, the collections, a reflection of corporate profitability, are still way below the level FY20, the year before Covid ravaged the economy. Taxpayers have to deposit 15% of their estimated annual taxes as advance tax in the first quarter of a fiscal year.
The net direct tax collections include corporation tax (CIT) at Rs 74,356 crore and personal income tax (PIT), including security transaction tax (STT), at Rs 1,11,043 crore as on June 15.
Refunds declined 32% to Rs 30,731 crore as on June 15 of FY22 compared with Rs 45,143 crore in the year-ago period.
“We are cautiously optimistic at this stage. Direct tax numbers not only speak of the strong and system bound foundations of the tax department but also resilience of many sectors of the economy which stood up to the current challenges,” Central Board of Direct Taxes (CBDT) chairman JB Mohapatra told FE.
“The jump in the direct tax collections in Q1FY22 relative to Q1FY21, reflects healthy exports and a continuation of various industrial and construction activities, given the lower stringency of the staggered regional lockdowns in 2021 vis a vis the nationwide lockdown in 2020. This supports our expectation that GDP will record a double-digit expansion in Q1FY22,” said rating agency Icra chief economist Aditi Nayar.
The gross direct tax collections (before refunds) rose 57% to Rs 2,16,602 crore as on June 15, 2021, compared with Rs 1,37,825 crore in the corresponding period of the preceding year. This includes CIT at Rs 96,923 crore and PIT at Rs 1,19,197 crore. Besides advance taxes, other minor head wise collection comprises tax deducted at source of Rs 1,56,824 crore, self-assessment tax of Rs 15,343 crore, regular assessment tax of Rs 14,079 crore, dividend distribution tax of Rs 1,086 crore and tax under other minor heads of Rs 491 crore as on June 15 of FY22.
“This (Q1FY22 advance tax) comprises CIT at Rs 18,358 crore and PIT at Rs 10,422 crore. This amount is expected to increase as further information is received from Banks,” the CBDT said in a statement.