Riding on rising corporate profitability and higher salaries, net direct tax collection in April 1-January 10 hit nearly 81 per cent of the Budget Estimate for FY24, the Income Tax Department said on Thursday. Given this trend, the full-year collection is expected to exceed the Budget target by ₹80,000-90,000 crore.
The direct tax collection target for the current fiscal year is ₹18.23-lakh crore. Direct taxes include corporate and personal income tax.
A Central Board of Direct Taxes (CBDT) statement said that direct tax collection, net of refunds, stands at ₹14.70-lakh crore, which is 19.4 per cent higher than the mop-up in the corresponding previous period. The collection is 80.6 per cent of the Budget Estimates for direct taxes for FY24. “The provisional figures of direct tax collections up to January 19, 2024, continue to register steady growth,” the statement said.
During the period under consideration, gross collections totalled ₹17.18-lakh crore, 16.8 per cent higher than the gross collections for the corresponding period of last year. Refunds amounting to ₹2.48-lakh crore were issued for the April 1, 2023, and January 10, 2024 period. After adjustment of refunds, the net growth in corporate IT collections is 12.4 per cent and that in personal IT mop-up is 27.2 per cent (including Securities Transaction Tax or STT). Earlier, CBDT Chairman Nitin Gupta had said that the direct tax collection will surpass the FY24 BE of ₹18.23-lakh crore. “We will exceed the Budget target. The economy is doing well and we will get a better picture of full-year tax collection once the third instalment of advance tax numbers come in by December 15,” Gupta had said.
Advance collections
Provisional figures of totaladvance tax collectionsfor FY24 (as on December 17)stand at₹6.25-lakh crore against ₹5.21-lakh crore for the corresponding period of FY23, agrowth of around 20 per cent. These collections are of three instalments June 15, September 15 and December 15) and comprise three-fourth of the total tax payable.
Commenting on the collection, Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co, said this is thamks to the government’s multi-pronged approach to formalise the economy. Increasing digital data sources through third party reporting under TDS and TCS also seems to have contributed to higher compliance and direct tax collections, she said.
Sumit Singhania, Partner, Deloitte India, said the shift to the new tax regime for individual taxpayers has been instrumental in encouraging voluntary compliance. “At the same time, corporate tax collections reflect earnings growth as well as enhanced tax reporting on the back of a more sophisticated taxpayer data triangulation. Both trends will continue to show the way for the government to continue the tax reforms in the coming years,” he said.
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