Economy

Gross direct tax collection grows 16.7% to ₹5.47 lakh crore in April-September

Our Bureau New Delhi | Updated on October 04, 2018 Published on October 04, 2018

Positive signs The overall growth in direct tax collections for the first six months is encouraging, say experts   -  Doucefleur

Corporate Advance Tax mop-up sees steep increase of 16.4% compared to last year

The Finance Ministry on Thursday announced that collections from direct taxes crossed ₹5.47 lakh crore during the first six months (April-September) of the current fiscal. Direct taxes comprise personal income tax (which also include Securities Transaction Tax or STT) and corporate income tax (CIT).

The collection, on gross basis, is 16.7 per cent higher than the corresponding period of the previous fiscal. Net collections (after adjusting for refunds) have increased 14 per cent to ₹4.44 lakh crore during the period under consideration and accounts for 38.6 per cent of the total Budget Estimates of Direct Taxes for the current fiscal which is pegged at ₹11.50 lakh crore. The growth rate is as estimated and the Finance Ministry is hopeful of collections crossing the target.

According to a statement, the gross corporate tax collections grew 19.5 per cent while personal income tax collections grew 19.1 per cent. After adjustment of refunds, the net growth in CIT collections were 18.7 per cent and PIT collections were 14.9 per cent. Refunds amounting to ₹1.03 lakh crore have been issued during April -September, which is 30.4 per cent higher than refunds issued during the same period in the preceding year.

An amount of ₹2.10 lakh crore has been collected as Advance Tax, which is 18.7 per cent higher than the collections during the corresponding period last year. The growth rate of Corporate Advance Tax is 16.4 per cent and that of PIT Advance Tax is 30.3 per cent.

Encouraging sign

Commenting on the collection, Pranav Sayta, Partner & Transaction Tax Leader at EY India, said while the overall growth in direct tax collections for the first six months is encouraging, what is particularly inspiring is the steep increase in the growth rate in Corporate Advance Tax collections compared to last year. “One hopes that this trend is maintained since this could be one of the key indicators for achievement of robust economic growth as well as revival of investment and employment generation.”

Meanwhile, Naveen Wadhwa, DGM at Taxmann.com, felt though there is a surge in the collections in the recent quarters, the figures fall short of estimated tax collections. In the first two quarters of the current fiscal, the actual revenue collection is 38.60 per cent (of estimate) against the actual revenue of 39.40 per cent (of target) during corresponding period of last fiscal. The I-T Department has maintained almost the same percentage in terms of increase in personal income-tax. Last year personal income-tax increased at the rate of 30.10 per cent viz-a-viz 30.3 per cent in the current financial year.

“The surprising element in the statistics revealed by the government is the increase in Corporate Advance Tax. Despite the fact that for domestic companies, that have a turnover of up to ₹250 crore, the tax rate has been reduced to 25 per cent, the advance-tax has increased by 16.4 per cent, which is almost twice the growth (8.10 per cent) witnessed last year,” Wadhwa said.

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Published on October 04, 2018
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