Wednesday, 09 Oct, 2024
By: Yash Gupte
Direct tax revenue, which includes income and corporate taxes, is anticipated to increase by more than 17 percent in FY23. Image Source: IANS
As of February 10, 2023, gross direct tax revenues for the fiscal year 2022–23 were Rs 15.67 lakh crore, up 24.09 percent from the same period last year.
The Ministry of Finance recently released the provisional figures of Direct Tax collections up to February 10, 2023. As of February 10, 2023, gross direct tax revenues for the fiscal year 2022–23 were Rs 15.67 lakh crore, up 24.09 percent from the same period last year. Net of refunds, direct tax receipts are Rs. 12.98 lakh crore, which is 18.40 percent more than net collections for the same period previous year. This collection is 91.39 percent of the total Budget Estimates of Direct Taxes for FY 2022-23 and 78.65 percent of the Revised Estimates of Direct Taxes for FY 2022-23.
The government added that from 1 April 2022 to 10 February 2023, refunds of Rs. 2.69 lakh crore were issued, which is 61.58 percent more than what was done during the same time period the year before. The government has projected a 10.5 percent growth in revenues from corporate and individual income tax to Rs 18.23 lakh crore in the next fiscal. Direct tax revenue, which includes income and corporate taxes, is anticipated to increase by more than 17 percent in FY23. Also, it must be noted that the FY23 has also witnessed record growth in gross corporate income tax (CIT) and gross personal income tax.
Source: Reserve Bank of India
*Up to February 10, 2023
The central government’s direct tax collection has increased more than four times in last 12 years. The direct tax collection in the FY2010-11 was Rs 4,45,994 crore this increased to Rs 8,49,713 crorein FY2016-17 and now it has further increased to Rs 15,67,000 crore in FY2022-23 and that too the direct tax collection for the current financial year is recorded only till February 10, 2023. The direct tax collection for the FY2022-23 is record high till date.
One of the concerns is the prediction of a drop in direct tax collection in FY2023-24. The current fiscal year has seen a record increase in net direct taxes, which are made up of personal income tax and the tax on corporate profits, exceeding the figures forecast in the Budget. Prior to the announcement of the Union Budget 2023–24 on February 1, 2023 a government source warned reporters that the predicted lower nominal GDP growth in 2023–24 on the basis of predictions of a worldwide recession could have an impact on income tax collection. Next fiscal year, real GDP growth is projected to decrease to 6–6.5%, with nominal GDP growth also expected to be lower due to falling inflation.
