Also, average tax paid by an individual filer came in at close to Rs 35,000 in H1, up from a little over Rs 27,000 in April-August
Even after the deadline for filing income tax returns ended on August 31, the growth in taxpayers filing e-returns continued to grow robustly, and for April-September, a 65% growth was witnessed over the year-ago period, data from the Central Board of Direct Taxes (CBDT) showed. The growth in the April-August period was 70%. Moreover, the average tax paid by an individual filer came in at close to Rs 35,000 in H1, up from a little over Rs 27,000 in April-August. Industry experts said that the rise in the average tax paid was attributable to the second tranche of advance tax — 45% of the assessed advance tax was to be paid by September 15 — paid by larger assessees.
As a result, personal income tax collected in September stood at Rs 49,354 crore — the highest monthly collection since April. FE had earlier reported that despite a growth in taxpayers filing returns, the average ticket size had been going down progressively over the last five years. In the previous two years (FY18 and FY17), while the growth rate for e-filers for the respective April-September periods were 19% and 18%, respectively, the average tax paid had declined marginally from about Rs 50,000 to Rs 48,800.
In the face of below-par indirect tax collection, the government has been pinning its hope on better-than-estimated direct tax mop-up to ease pressure on fiscal deficit breaching the target of 3.3% of GDP for the current fiscal. Slower-than-projected growth in revenue, especially tax and disinvestment receipts, resulted in the Centre’s fiscal deficit in the first six months of this fiscal to be about Rs 5.95 lakh crore or 95.3% of the full-year target, according to data released by the Controller General of Accounts on Thursday.
In the corresponding period last year, the deficit was 91.3% of the relevant annual target and the government finally had to allow a 33 basis points slippage from the targeted deficit of 3.2% of GDP for FY18. Net tax receipts (post refunds and devolution to states) grew just 7.5% in H1FY19 against the year-ago period. A y-o-y growth of 19% is required to raise the budgeted amount of Rs 14.8 lakh crore from taxes for the full year.
Even though first, demonetisation, and later, the GST helped add pace to tax base expansion, the rate of growth in personal income tax collection hasn’t risen commensurately. The fact that the average income tax paid by individual taxpayers has come down indicates that mere inclusion of more assessees, who contribute little to the tax revenue, won’t immediately serve the purpose of improving the tax-GDP ratio.