Extra collections (post-devolution) would help the Centre to keep the fiscal deficit within the revised estimate of 5.8% of GDP in FY24 even though the nominal GDP size is expected to be a little lower than projected earlier.
The Centre’s advance direct tax receipts for the fourth quarter of the current fiscal from companies, LLPs and individuals rose by a decent 6% on quarter to Rs 2.85 trillion as per the data till March 15 of the current financial year.
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The sequential advance tax increase in Q4 comes over a 19% annual increase in advance tax receipts for the third quarter of FY24, indicating continued traction in the economic activity. Advance tax collections are a good indicator of corporate profitability and rise in the earnings of individuals. March 15 was the due date for fourth quarter advance tax payments by companies and individuals.
Despite higher refunds during the period till March 15, direct tax receipts (post-refund) stood at Rs 18.91 trillion or 97% of the full-year revised estimate (RE) of Rs 19.45 trillion for FY24, indicating that receipts for the full year will exceed the revised estimate.
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Extra collections (post-devolution) would help the Centre to keep the fiscal deficit within the revised estimate of 5.8% of GDP in FY24 even though the nominal GDP size is expected to be a little lower than projected earlier.
In the budget presented on February 1 this year, the Centre raised the direct tax receipts target by Rs 1.22 trillion to Rs 19.45 trillion, largely due to buoyancy in personal income tax receipts.
Refunds were at Rs 3.34 trillion till March 15 of the current fiscal, about 9% higher than Rs 3.07 trillion in the whole of FY23, indicating faster processing of refunds.
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The rise in corporate profitability across various sectors led to continued buoyancy in the quarterly advance tax mop-up. Advance tax receipts rose from Rs 1.17 trillion in Q1FY24, Rs 2.39 trillion in Q2, Rs 2.7 trillion Q3 and Rs 2.85 trillion in Q4FY24.
Till March 15, direct tax collections comprised corporation tax of Rs 9.16 trillion, or 99.2% of FY24RE. Despite Rs 1.22 trillion increase in the target in FY24RE, income tax receipts including securities transaction tax (STT) stood at Rs 9.75 trillion or 95.4% of FY24RE.
So far in the current fiscal, TDS and TCS receipts stood at Rs 10.3 trillion, securities transaction tax at Rs 34,130 crore and equalisation levy of Rs 3,527 crore.
