Over 90% jump in direct tax receipts in Q1, annual target may be surpassed

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July 12, 2021 3:15 AM

The stock market rally has more than doubled the securities transaction tax (STT) collections to Rs 5,373 crore in Q1FY22 compared with Rs 2,568 crore collected in the year ago quarter.

income tax, direct tax collectionThe healthy Q1 tax mop-up suggests that there is some space to reduce the cesses on petrol and diesel

The Union government’s net (post-refunds) direct tax collections rose 92% on-year to Rs 2,43,408 crore in the first three months of the current fiscal, thanks to a low base, a pick-up in economic activities, better compliance and lower refunds. The Q1FY22 receipts are 22% of the full-year target of Rs 11.08 lakh crore. In fact, the June quarter net direct tax collections are 43% higher than in Q1FY20 (pre-pandemic period), indicating that the receipts could exceed the annual target for this fiscal. It requires a 17% growth on-year to achieve the net tax revenue target of Rs 11.08 lakh crore for FY22. “We are optimistic (about higher collections),” a senior official told FE.

Equalisation levy (better known as Google tax) rose 300% on-year to Rs 631 crore in Q1FY22 as against Rs 158 crore collected in the year-ago quarter. The tax at 2% is levied on considerations received by a non-resident e-commerce operators such as Google and Amazon from e-commerce supply or services, and is being implemented as an interim measure to tax transactions arising in a digital economy, even as global consensus on taxation of digital economy is fast emerging.

The stock market rally has more than doubled the securities transaction tax (STT) collections to Rs 5,373 crore in Q1FY22 compared with Rs 2,568 crore collected in the year ago quarter. The benchmark BSE Sensex has rise 6% between April 1 and June 30, 2021. In April-June of the current fiscal, the gross direct tax collections (before refunds) stood at Rs 2,79,181 crore, up 49% year-on-year.

The gross direct tax collections include corporation tax (CIT) at Rs 1,47,486 crore in Q1FY22, an increase of 48% over Rs 99,963 crore collected in the year ago period. The gross personal income tax (PIT) at Rs 1,25,682 crore as on June 30 of FY22 was 49% higher than Rs 84,267 crore crore collected in the year-ago period. Refunds amounting to about Rs 36,000 crore were issued in Q1FY22. It was much lower than the refunds issued in the corresponding period in FY21.

Do you know What is FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

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