The net (post-refunds) direct tax collection for April-December period this fiscal was Rs 7.43 lakh crore, up 13.6% from the year-ago period. The growth in collection in the first nine months of the year was marginally lower than the rate of 14.4% required to meet the budget estimate of Rs 11.5 lakh crore for direct taxes in FY19. This is despite a robust 43.5% y-o-y growth in number of income tax e-returns filed for the first nine months of the fiscal, which stood at 6.25 crore. The refunds in the April-December period was Rs 1.30 lakh crore, 17% higher than the same period last year.
The government has been banking on direct tax collection to somewhat bridge the likely deficit in GST collections. Officials of CBDT had said last month that with most refunds already sanctioned and advance tax installment in December, the direct tax collections would grow at a higher pace.
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The lack of expected growth in mop-up prompted the CBDT chairman Sushil Chandra to send missives to tax commissioners across the country asking them to pull up their socks and improve collections in the last quarter of the fiscal. Chandra also expressed concern that the budget target may prove difficult to meet if collections don’t grow faster in Q4.
The third installment of advanced tax, which was to be paid by December 15, grew at lower rate compared with the first half of the fiscal. “The growth rate of corporate advance tax is 12.5% and that of personal income tax is 23.8%,” the government said. The comparable figures were 16.4% and 30.3% for April-September period. Advance tax is required to be paid in four installments of 15%, 45%, 75% and 100% by middle of June, September, December and March respectively.
The net growth in corporate income tax collections came in at 16% and that in personal income tax was 14.8%. “It is pertinent to mention that collections of the corresponding period of FY 2017-18 also included extraordinary collections under the Income Declaration Scheme (IDS), 2016 amounting to Rs 10,844 crore (third and last installment of IDS), which do not form part of the current year’s collections,” the government said.