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The Income Tax Department on Monday reported that net direct tax collection had surged 21 per cent to over ₹13.70-lakh crore during April 1 to December 17 period as against ₹11.36-lakh crore mobilised during the corresponding period of the previous fiscal.
It also said that the sum of three instalments of advance tax recorded a growth of around 20 per cent during the current fiscal.
Growth drivers
Though the department has not given any reason, but a combination of compliance and income growth boosted overall collection as well as advance tax collection. Higher collection also augers well for limiting the fiscal deficit as projected in the current year budget (2023-24) at 5.9 per cent of GDP (Gross Domestic Products).
According to the Department, net collection includes corporation income tax (CIT) at ₹6.95-lakh crore and personal income tax (PIT) including securities transaction tax (STT) at ₹6.73-lakh crore. Net collection means gross collection minus refunds and its target for full year is ₹18.23-lakh crore. During the period under consideration, gross collection rose to ₹15.96-lakh crore from ₹13.64-lakh crore showing a growth of 17 per cent. Refunds amounting to over ₹2.25-lakh crore issued.
Provisional figures of total advance tax collections for FY24 (as on 17.12.2023) stand at ₹6.25-lakh crore as against ₹5.21-lakh crore for the corresponding period of the immediately preceding financial year (i.e. FY 2022-23), showing a growth of around 20 per cent. These collections are of three instalments and comprise three fourth of total tax payable.
Advance tax is the income tax paid in advance for the income earned in a particular financial year. Usually, tax is to be paid when the income is earned. Still, under the tax provisions of advance tax, the taxpayer has to estimate the income for the entire year. And based on this estimate, tax is paid at specific time intervals. Here, it is important that the taxpayer estimates the income and then calculates the estimated tax on it to check whether he or she needs to pay advance tax and how much.
As per section 208 of the Income Tax Act 1961, every person whose estimated tax liability for the year is more than or equal to ₹10,000 is liable to pay advance tax. Those who are excluded from paying advance tax are senior citizens who are above the age of 60, not having any income from business or profession.
One can pay the advance tax in four instalments by 15th day of June, September, December and March. On or before June 15, 15 per cent of advance tax is payable. By September 15, it should be 45 per cent of payment less amount already paid. By December 15, it will be 75 per cent of advance tax less already paid and balance amount by March 15. Non-payment of advance tax will invite interest.
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