The Centre’s advance direct tax receipts for the first quarter of the current financial year from companies, LLPs and individuals rose by a robust 27% on year to Rs 1.49 trillion as of June 16, sources said.
Given that the advance tax had increased by 14% in Q1FY24, the sharp increase in Q1FY25 indicates continued traction in the economic activity. Advance tax collections are a good indicator of corporate profitability and rise in the earnings of individuals. Advance taxpayers have to pay 15% of their income tax liability by June 15 of each year.
Despite higher refunds during Q1FY25, overall direct tax receipts (after refund) stood at Rs 4.62 trillion, an increase of 21.6% on the year, indicating that receipts for the full year will likely exceed the target of Rs 21.99 trillion, which requires just about 12% growth over the actual collections in FY24.
Refunds were at Rs 53,140 crore till June 16, 2024, of the current fiscal, about 34% higher than Rs 39,578 crore in the year-ago period.
Direct tax receipts rose by a robust 17.8% on-year to Rs 19.64 trillion in FY24, helping the Centre undershoot the fiscal deficit at 5.6% of GDP as against the revised target of 5.8%.
The operating profit margin (OPM) of India Inc. will remain steady in the range of 15-18% in Q1FY25, despite the expected tapering in revenue growth, as raw material costs are expected to remain steady, Icra said in a report on Monday.
Till June 16, direct tax collections comprised corporation tax of Rs 1.81 trillion, up 15.3% on year. Income tax receipts including securities transaction tax (STT) stood at Rs 2.81 trillion, an increase of 26.6% on year.
So far in the current fiscal, TDS and TCS receipts stood at Rs 3.21 trillion, securities transaction tax at Rs 11,605 crore and equalisation levy of Rs 698 crore.