BackGross direct tax mop up dips 4.92% to 12.33 lakh crore in FY20
The net direct tax collection for the FY 2019-20 was less than the net direct tax collection for the FY 2018-19In FY 2019-20, amount of total refunds given was ₹1.84 lakh crore as compared to ₹1.61 lakh crore in FY 2018-19 which is a 14 per cent increase year-on-year
PremiumNEW DELHI : As a result of corporate tax rate cut, a hike in standard deduction and relief in personal income tax, the actual gross direct tax collection during 2019-20 fiscal dipped by 4.92 per cent to ₹12.33 lakh crore, the finance ministry said today. Had there been no foregone in corporate tax and personal income tax, gross collections would have clocked a 8% growth to ₹14.01 lakh crore in 2019-20. The gross direct tax collection in 2018-19 fiscal stood at ₹12,97,674 crore.
"It is a fact that the net direct tax collection for the FY 2019-20 was less than the net direct tax collection for the FY 2018-19. But this fall in the collection of direct taxes is on expected lines and is temporary in nature due to the historic tax reforms undertaken and much higher refunds issued during the FY 2019-20," the Central Board of Direct Taxes (CBDT) said in a statement.
The actual corporate tax and PIT revenue mop up stood at ₹6.78 lakh crore and ₹5.55 lakh crore, respectively, in 2019-20, taking the total actual direct tax collection to ₹12,33,720.
During the fiscal, the revenue foregone due to reduction in corporate tax rate was ₹1.45 lakh crore, while in PIT (due to increased tax rebate limit and standard deduction) it was ₹23,200 crore.
If this had not happened, then corporate tax and PIT collection in 2019-20 would have been ₹8.23 lakh crore and ₹5.78 lakh crore, respectively.
Thus, the gross direct tax mop up would have been ₹14.01 lakh crore, which would have been a 8.03 per cent growth over 2018-19, it said.
In 2019-20 fiscal, the nominal GDP growth rate was 7.20 per cent.
"By removing the effect of the extraordinary and historic tax reform measures and higher issuance of refunds during the FY 2019-20, the buoyancy of total gross direct tax collection comes to 1.12 and almost 1 for Corporate Tax and 1.32 for Personal Income Tax. These buoyancies indicate that the growth trajectories of both the arms of direct taxes, i.e., Corporate Tax and PIT are intact and are rising steadily.
"Further, the higher growth rate in direct taxes as compared to growth rate in the GDP even in these challenging times proves that recent efforts for the widening of the tax base undertaken by the government are yielding results," the CBDT said.
"There are reports in a certain section of media that the growth of direct taxes collection for the FY 2019-20 has fallen drastically and buoyancy of the direct tax collection as compared to the GDP growth has reached negative. These reports do not portray the correct picture regarding the growth of direct taxes," CBDT said.
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