Thursday, 10 Oct, 2024
The Center's fiscal deficit, which is the difference between receipts and spending that is covered by borrowing, stood at Rs 6.43 trillion. Image Source: IANS
As on October 09, 2023, the Net Direct Tax revenues were Rs. 9.57 lakh crore, while the gross collection was at Rs 11.07 lakh crore, which is 17.95 percent higher than the gross collections for the same period last year.
According to provisional Direct Tax Collections data for the Financial Year 2023–24 (as of October 09, 2023), net collections are at Rs. 9.57 lakh crore, up from Rs. 7,00,416 crore during the same period of the previous Financial Year (i.e. FY 2022-23), a 21.82 percent rise. This collection is 52.50 percent of the total Budget Estimates of Direct Taxes for F.Y. 2023-24. As on October 09, 2023, the Net Direct Tax revenues were Rs. 9.57 lakh crore, while the gross collection was at Rs 11.07 lakh crore, which is 17.95 percent higher than the gross collections for the same period last year.
In terms of gross revenue collections, the growth rates for Corporate Income Tax (CIT) and Personal Income Tax (PIT) are as follows: CIT is 7.30 percent, while PIT is 29.53 percent (PIT only)/29.08 percent (PIT plus STT). The net growth in CIT collections after refund adjustments is 12.39 percent, while the net growth in PIT collections is 32.51 percent (PIT only)/31.85 percent (PIT plus STT).
Nitin Gupta, Chairperson of Central Board of Direct Taxes in an interview with The Hindu said, “While tax refunds amounting to ₹1.5 lakh crore have been remitted to taxpayers so far, some refunds are being withheld on the basis of pending tax demands from the past that taxpayers are being given a chance to address. Moreover, challenges with validating bank accounts of about 35 lakh taxpayers, who may have provided incorrect bank branch codes, are also posing a hurdle.”
As of September 23, there had been 7.09 crore income tax returns filed, and 2.75 crore cases had received refunds. By October 9, there were 7.27 crore total returns filed, and 7.15 crore of those were validated. 7.5 crore tax returns were submitted last year.
The Center's goods and services tax (GST) collections have increased significantly thus far in terms of indirect taxes. The Center's fiscal deficit, which is the difference between receipts and spending that is covered by borrowing, stood at Rs 6.43 trillion, 36 per cent of the estimate for the whole year according to data from the Controller General of Accounts (CGA), demonstrating that the government's budget management was in order.
Source: Reserve Bank of India
*Up to October 09, 2023
As per the Ministry, Net Direct Tax Collections have increased by 121.18 percent from Rs. 6,38,596 crore in FY2013-14 to Rs. 14,12,422 crore in FY2021-22. Talking about the Gross Direct Tax Collections, it increased by over 126.73 percent in FY2021-22 reaching a figure of Rs. 16,36,081 crore from Gross Direct Tax Collections of Rs. 7,21,604 crore in FY2013-14.
As of June 17, 2023, the Advance Tax collections for the first quarter of the FY 2023–24 were Rs 1,16,776 crore, up 13.70 percent from the Advance Tax revenues of Rs 1,02,707 crore for the same period of the Financial Year that was immediately prior. Corporation Tax (CIT) at Rs 92,784 crore and Personal Income Tax (PIT) at Rs 23,991 crore make up the Advance Tax Collection of Rs 1,16,776 crore as on June 17, 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 crore in FY2016-17 and now it has further increased to Rs 16,61,000 crore in FY2022-23. The direct tax collection for the FY2022-23 is record high till date.
Other positive news was the increase in personal income tax to GDP ratio. The personal income tax as a percentage of GDP has gone up from 2.11 percent in 2014-15 to 2.94 percent in 2021-22.
A direct tax is one that is paid by an individual or group of individuals directly to the body that levied it. For instance, an individual taxpayer may pay direct taxes to the government for a variety of reasons, such as income tax, real estate tax, personal property tax, or asset taxes. According to the sources from revenue department, the reasons for high tax collection are adoption of digital initiatives aimed at simplifying compliance and expansion of the tax base in recent years
According to the time series data provided by the Central Board of Direct Taxes (CBDT), direct tax buoyancy, a measure of growth in the collection of personal income tax and corporation tax versus the growth in GDP rose to 2.52 in FY22, the highest level in the previous 15 years. A higher buoyancy indicates more effective tax collection. The highest buoyancy, 2.59, was observed in FY03, while it became negative (-1.21) in FY20. The CBDT highlighted the data for 22 years beginning in 2000–21. Tax buoyancy was not calculated for FY21 because both GDP and tax growth were negative. So buoyancy increased in FY22, most likely as a result of a low base effect.
One of the concerns was the prediction of a drop in direct tax collection in FY2023-24. The fiscal year 2022-23 had 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. In the current financial year, real GDP growth is projected to decrease to 6–6.5 percent, with nominal GDP growth also expected to be lower due to falling inflation.
But despite of these concerns, the latest data released by the ministry shows that there has been a remarkable improvement in the direct tax collections in the FY2023-24.
