CBDT Chairman on Saturday said there are many factors behind record direct tax collections in the country but the surge can mainly be attributed to the reforms brought in by government in income tax (IT) department and Indian economic strength.
The government’s direct tax collections have exceeded the revised estimates for FY22 by ₹1.13 lakh crore, thanks to robust advance tax mop-up in the last quarter.
This will provide the government flexibility as the Russia-Ukraine conflict and soaring energy prices threaten to upset its spending math.
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Direct tax collections, comprising corporation tax and personal income tax and net of refunds, touched ₹13.63 lakh crore as of 16 March, 9% higher than the FY22 revised estimate of ₹12.5 lakh crore announced last month.
In an interview with news agency PTI, CBDT chief J B Mohapatra said apprehensions about the state of the economy, battered by the Covid-19 spread, were belied as it “did so well and the corporates came out so well (in paying taxes)” during the current financial year 2021-22.
Mohapatra exuded confidence that the direct tax mop up, which primarily includes personal income tax and corporation tax revenue receipts, will continue its present streak and the department will be able to successfully chase the target of collecting ₹14.20 lakh crore in taxes in the next fiscal.
“It will be very difficult to say how things will pan out the next year but there is no room to say that good times only last for four quarters,” Mohapatra told PTI in an interview.
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The CBDT chief cited key reasons behind the record collections which include the strength in Indian economy, reforms in IT department and various policy measures that have been taken over a period of time in and outside the Budget.
After the Q4 advance tax payments, direct tax collections are 48% more than the year earlier.
Mumbai recorded the highest collections at ₹4.5 lakh crore, a growth of 48% over last year. Bengaluru, Delhi and Chennai posted growth in direct tax mop-up by 44%, 38.1% and 48%, respectively.
Advance tax is paid as and when the money is earned in four instalments, rather than at the end of the fiscal. Gross direct tax collections (before refunds) stood at ₹15.5 lakh crore, up 38% compared to ₹11.2 lakh crore in the corresponding period of 2020-21. Refunds fell 7.42% from last year at ₹1.87 lakh crore.
