The Centre’s direct tax collections, net of refunds, increased by a robust 18.4% on year till February 10 this year, although the pace of growth has moderated of late.
As per data released by the finance ministry on Saturday, direct tax collections stood at Rs 12.98 trillion or 91.4% of the total Budget Estimate (BE) for the current fiscal, or 79% of the revised estimate (RE) put out in the recent Budget. “The provisional figures of direct tax collections up to February 10 continue to register steady growth,” said the Central Board of Direct Taxes (CBDT) in a statement.
With a recovery in economic activities, the government has been confident of a sharp increase in its tax revenue this fiscal.
Accordingly, the RE for the current fiscal has projected gross direct tax revenue (before devolution to states) at Rs 16.5 trillion, 16.2% higher than the initially budgeted target (BE) of Rs 14.2 trillion. This would translate into a 17% increase from 2021-22, when the collection was Rs 14.08 trillion.
Direct tax collections prior to refunds increased by 24.1% year-on-year to Rs 15.67 trillion between April 1, 2022 and February 10 this year.
After adjustment of refunds, the growth in corporate income tax was 15.8% in the period while personal income tax mop-up rose by 21.9%. Personal income tax collections including securities transaction tax grew by 21.2%.
Refunds amounting to Rs 2.69 trillion have been issued during the period under review, 61.6% higher than the same period last fiscal, the CBDT further said.
The finance ministry is confident that direct tax collections will meet the RE, if not even better it, with the expectation that the economic recovery will continue in the fourth quarter of the fiscal. It also expects the fourth tranche of advance tax payments, due on March 15, to bring in hefty tax revenue.
The higher nominal GDP growth of 15.4% this fiscal, as well as the focus on improved compliance, is also expected to help aid collections.
The pace of growth in net tax collections has, however, eased from a near 26% growth up to November 10. Direct tax collections, net of refunds, grew by over 19.5% till January 10, 2023.