Direct tax receipts in April-August period soar 17.5% to Rs2.24 trillion
New Delhi: Net direct tax receipts during the April-August period has grown 17.5% to Rs2.24 trillion, indicating tax collections are on track to achieve the full-year target.
In the annual budget for 2017-18, finance minister Arun Jaitley had set a full-year growth target of 15.7% for corporate and personal income tax receipts at Rs9.8 trillion.
Direct tax receipts in the first five months of the financial year are a tad less than a fourth of the projected full-year collections, according to a statement from Central Board of Direct Taxes (CBDT).
The government expects robust tax collections this financial year supported by its crackdown on black money as well as from a larger pool of income tax payers. Reforms in the indirect tax side is also expected to add more direct tax assessees as the authorities hope to integrate the informal part of the economy to the formal one.
The tax department received about 5.6 million new personal income tax returns relating to 2016-17 financial year by the 5 August deadline for filing income tax returns. Since the last date for filing corporate tax returns by businesses is in September, the tax base could further widen by the end of this year, said a tax official on condition of anonymity.
Net corporate tax collection grew at 18.1% and net personal income tax receipts grew 16.5% during the April-August period this year from a year ago, the CBDT statement said.
However, refunds given in the period, which is 7.2% less than what was issued in the same time a year ago, aided in maintaining the robust growth figures. The tax department issued Rs74,089 crore of refunds during the period under review, the statement said.
Gross corporate tax receipts grew at 5% and personal income tax at 16% during the period under review from a year ago, said CBDT. The comparatively slower growth rate in gross corporate tax receipts come in the wake of the temporary disruption caused by the rollout of goods and service tax (GST) and a gradual recovery from the impact of demonetisation. Economic growth had unexpectedly slowed to 5.7% in the June quarter, its slowest pace in three years.
“We need to wait for the second quarter advance tax payment by businesses falling due on 15 September before making an assessment on corporate tax collection trend,” said Rahul Garg, partner, PwC India.
The Modi administration is banking on strong tax collection to make up for any shortfall in its overall revenues due to uncertainties over deferred spectrum payment receipts from the debt-ridden telecom sector, lower dividend from the Reserve Bank of India and doubts over disinvestment targets.