Direct tax collection in India: The first half of the financial year 2024 has witnessed a year-on-year jump of 20 per cent in advance tax collections.
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The total pool of funds mobilised is now up to Rs 3.54 lakh crore, Economic Times reported, citing sources in the know. Gross tax collections till September 15 (FY24) was Rs 9.85 lakh crore. With the government having issued Rs 1.22 lakh crore as refunds so far, the net tax collections stand at Rs 8.63 lakh crore, up 23 per cent year on year. Advance tax collections for the first half of the last fiscal were Rs 2.95 lakh crore.
The advance tax collection numbers could climb more still as the final tally till September 15, the deadline for paying advance tax in the second quarter, is computed by factoring in further information that is poised to come from the banks on Monday. The official data is likely to be released next week.
What does higher advance tax collection mean for the economy?
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“It is likely that the cumulative tax revenues will display a healthier trend at end September 2023, helping soften the rise in the fiscal deficit relative to the year-ago period,” Aditi Nayar, chief economist at rating agency ICRA, told Economic Times.
Rahul Garg, partner at Pricewaterhouse & Co LLP said, “stand-alone growth of second quarter advance tax at 20 per cent shows continued positive outlook,” adding that “together with consistent robust GST, the revenue target seems to be on the right path and pace.”
Government’s expectations
For the this fiscal, the Centre has set a budget of Rs 18.20 lakh crore for direct tax collection. This is estimated to grow at a rate of 9.6 per cent, which is slower than the direct tax collection growth seen in the previous fiscal year.
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The budget estimate for direct tax revenue in FY23 was Rs 14.2 lakh crore, but it was later revised to Rs 16.5 lakh crore. Ultimately, it settled at a slightly higher amount of Rs 16.61 lakh crore.
