Government claims issuing over ₹88,000-crore income-tax refund so far this fiscal

The Finance Ministry has claimed higher income-tax refund and final approval for some of the pending housing projects on Friday. With lower tax collection due to pandemic and other reasons, higher refund will affect net direct tax collection. Not such a good news for the government which has not cut on expenditure.

The Ministry claimed issuing over ₹88,000 crore of refund from April onwards and also informed about completion of over 20,000 homes through assistance under Special Window for Affordable & Mid-Income Housing Fund (SWAMIH).

The Central Board of Direct Taxes said in a tweet: “…. issued refunds of over ₹88,652 crore to more than 24.64 lakh taxpayers from April 1, 2020 onwards.” Of this, personal income tax has share of ₹28,180 crore in over 23 lakh cases, while refund in the corporate tax category amounts to ₹60,472 crore for over 1.58 lakh assessees.

Citizen’s Charter of the Income Tax Department prescribes a time line of six months for issue of refunds along with interest, provided the return has been filed electronically. This time will be months for returns filed manually. It may be noted that it is intent and department is not legally bound to do so.

Under Aatmanirbhar Bharat campaign, the government has already given its indication for faster processing of refund to give some comfort to individual and businesses facing tight liquidity.

In fact, in the first presentation under the campaign, the government claimed that it issued all the pending income-tax refunds up to ₹5 lakh, immediately benefiting around 14 lakh taxpayers. It has also decided that all pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and co-operatives shall be issued immediately.

Net collection down 23%

According to data collected by Controller General of Accounts (CGA), net collection under corporate tax during April-June period was ₹54,212 crore against ₹70,640 crore during corresponding period of financial year 2019-20, showing a decline of over 23 per cent. Similarly, net personal income tax collection dipped to ₹62,123 crore against ₹96,927 crore registering de-growth of around 36 per cent.

Meanwhile, the Finance Ministry has said that as on August 20, 22 projects with investment of ₹3,472 crore accorded final approval under SWAMIH. This will lead to completion of 20,380 home units.

These 22 are part of 101 projects for which sanction has been granted. About 101 projects involve an investment of ₹10,300 crore that would target to provide relief to 71,559 homeowners. So far 7 sites have activated construction plans with material and manpower.