The Centre’s net direct tax collections (post-refunds) grew by a robust 25.71% on year till November 10 of the current financial year even though refunds rose sharply by 61% during the period.
Both personal income tax (PIT) and corporate income tax (CIT) performed much better than anticipated, thanks to higher compliance and a favourable base effect.
“Direct Tax collection, net of refunds, stands at Rs 8.71 trillion which is 25.71 % higher than the net collections for the corresponding period of last year. This collection is 61.31% of the total Budget Estimates of Direct Taxes for FY23,” the finance ministry said.
The gross direct tax collections during the period stood at Rs 10.54 trillion which is 30.69% higher than the gross collections for the corresponding period of last year.
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“After adjustment of refunds, the net growth in corporate income tax collections is 24.51% and that in personal income tax (PIT) collections is 28.06% (PIT only) 27% (PIT including securities transaction tax).”
The Centre’s gross direct tax collections for FY23BE is Rs 14.2 trillion (almost the same as was the actual collection in FY22), but the collections are likely to be about Rs 3.8 trillion more than the BE, according to an FE analysis. Post devolution to states, direct taxes could fetch net additional tax receipts of about Rs 2.5 trillion to the Centre’s kitty.
Refunds amounting to Rs 1.83 trillion have been issued from April 1, 2022, to November 10, 2022, which are 61.07% higher than refunds issued during the same period in the preceding year, the ministry said.