Direct tax collections are likely to be 25-30% more than the budget estimate (BE) of Rs 14.2 trillion for the current fiscal, the Central Board of Direct Taxes (CBDT) chairman Nitin Gupta said on Tuesday.
Given the current buoyancy in tax collections, the BE for FY24 is also likely to be higher, Gupta said without elaborating.
With massive tax evasion detected in the online gaming industry, Gupta also said that the Budget could make some tweaks in the tax deducted at source (TDS) provisions for the sector to plug tax leakages.
At present, a 10% TDS is levied on income from online gaming. The gross gaming winning amount is chargeable at 30% tax without any rebate or deduction.
“There is existing TDS provision if it needs to be modified or retained in the same way that needs to be seen,” Gupta said.
The Centre’s gross (post-refunds) direct tax collections for FY23BE is Rs 14.2 trillion, almost the same as the actual collection in FY22, but the collections are likely to be about Rs 3.8 trillion more than the BE. Post devolution to states, direct taxes could fetch net additional tax receipts of about Rs 2.5 trillion to the Centre’s kitty, helping it fund additional expenditure on subsidies.
“For the current year, we believe we would be exceeding the budget estimate by a sizeable margin, it could be 25-30% higher than what (target) has been given to us. Next year, given the buoyancy of tax collection, we would be giving the good collection to the government,” Gupta said.
Direct Tax collection, net of refunds, rose 25.7% on year to Rs 8.71 trillion till November 10 of the current fiscal. This collection is 61.31% of the budget estimate of direct taxes for FY23.
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Gupta said the tax department is working to see how a better audit trail can be established for money spent and earned from online gaming activities.
“Online gaming and betting is a new kid on the block. We will take a view at the stage of budget preparation and see how evasion can be controlled and at the same time make it easier for the taxpayers to maintain accounts and pay taxes,” Gupta added.
The income tax department has recently detected that players associated with just one gaming portal have been found to have netted as much as Rs 58,000 crore in the three years through FY22 as the gross winning amount, but paid little tax.