The Union government has collected ?11.26 trillion so far this financial year in direct tax revenue after adjusting for refunds, showing an 18.4% annual growth, aided by strong growth in personal and corporate earnings as well as in taxes on stock market transactions, the income tax department said on Friday.
Net direct tax revenue receipt after adjusting for refunds was ?9.5 trillion in the same period a year ago.
The tax department said that it has refunded ?2.3 trillion to taxpayers, including individuals and businesses, which was over 46% more than the tax refunded in the same period a year ago.
Net direct tax revenue of ?11.26 trillion collected as of 10 October accounts for more than half of the ?22 trillion budgeted for this financial year, indicating that revenue collection was on a strong footing.
Collecting more than half of the target in the first half of the fiscal itself is likely to give confidence to policy makers about comfortably meeting budget estimates. Net direct tax collection growth rate is faster than the 12.8% growth assumed in the full year budget presented in July after the national elections.
This is a positive sign, experts said.
“This growth can be attributed to various factors, including widened tax base, improved voluntary tax compliance by the taxpayers, economic growth and effective tax administration backed by extensive technology usage and data analysis. Overall, this was expected,” said Amit Maheshwari, Tax partner at AKM Global, a tax and consulting firm.
Corporate tax collection after adjusting for refunds grew over 11% so far this financial year to ?4.94 trillion, while personal income tax receipts after refunds stood at ?5.98 trillion, showing an impressive 23% growth.
While net corporate tax collection growth is in line with budget estimates, personal income tax collection growth is well above the budget estimate of 14%, showed budget documents.
Dividends from companies are now taxed in the hands of the shareholders after an amendment to the tax law in 2020, giving a boost to personal income tax collection.
Securities transaction tax (STT) collection has jumped 87% so far this financial year to ?30,630 crore, up from ?16,373 crore collected in the same period a year ago. STT collection has been buoyant for some time in line with hectic stock market activity.
Gross direct tax collection before adjusting for tax refunds stood at ?13.6 trillion as of 10 October, showing a growth of 22.3% from the year-ago period.
Corporate tax receipt before adjusting for refunds stood at ?6.1 trillion, while personal income tax receipt before refunds stood at ?7.13 trillion in the period under review.
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