Pune region led the surge in net direct tax collection recording a growth of over 87 per cent during the April 1-December 16, 2021 period. Overall, net collections surged to over ₹9.45-lakh crore, which is 61 per cent higher than the mop-up during the corresponding period of FY21. It is also 40 per cent over the collection in the corresponding periods of FY20 and FY19.

Direct taxes comprise mainly personal income tax and corporation tax. Net collection means gross collection minus refund. Budget 22 estimated the direct tax collections at ₹11.08-lakh crore, that is, an increase of ₹2.03-lakh crore over the Revised Estimate of 2020-21. Direct taxes are estimated to constitute 49.97 per cent of the gross tax revenues in 2021-22.

The nation has been divided into 18 regions for administrative purpose. From the collection point of view, Mumbai contributes maximum, followed by Bengaluru, Delhi and Chennai. Officials said that out of 18, ten regions showed a growth rate between 60 per cent and 87 per cent while for the remaining, growth rate was 34.5- 60 per cent. Guwahati region recorded the lowest growth of 34.5 per cent.

Third instalment

Net direct tax collection got a boost from the third instalment of advance tax that fell due on December 15. An improvement in advance tax collection suggests an economy on recovery.

According to a Finance Ministry statement, the total advance tax collection after the third instalment reached ₹4.60-lakh crore against ₹2.99-lakh crore in the previous fiscal, a growth of 53.5 per cent. It is also 44 per cent and 50 per cent higher than the mop-up in FY20 and FY19, respectively.

Total advance tax related to personal income tax jumped to around ₹1.11-lakh crore while three instalments of advance corporate tax fetched over ₹3.49-lakh crore.

Overall collection up

The jump in advance tax collection boosted the overall numbers as gross collection from April till date topped ₹10.80-lakh crore against ₹7.33-lakh crore in the corresponding period of FY21, showing an increase of over 47 per cent.

Advance tax is the income-tax paid in advance for the income earned in a particular financial year. 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, excluding citizens above the age of 60 with no income from business or profession.

The advance tax is payable in four instalments by the 15th day of June, September, December and March. Fifteen per cent of the advance tax is payable on or before June 15. By September 15, it should be 45 per cent minus the amount already paid. By December 15, 75 per cent and the balance by March 15. Non-payment of advance tax will invite penal interest.

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Published on December 17, 2021