The Centre’s direct tax collection from corporations and individuals after adjusting for tax refunds has reached ?15.8 trillion so far this year, jumping 16.45% over the previous year and outpacing the budget estimate.
While non-corporate tax collection from individuals and other entities like partnerships and local authorities, after adjusting for refunds, recorded a 22% jump so far this year to ?7.97 trillion, the same from corporations improved 8.6% to ?7.42 trillion, the Income Tax Department said on Wednesday citing revenue figures up to 17 December.
Before adjusting for refunds, corporate tax collections rose 17% annually.
The government has budgeted 13% annual growth in direct tax collections this year. With over a quarter left, corporate and non-corporate tax collections--mostly personal income tax collections—have reached about 72% of the full-year target of ?22 lakh crore, showed data.
The department gave ?1.82 trillion in corporate tax refunds so far this year, an improvement of over 70% from a year earlier. In the case of non-corporate taxes, it refunded ?1.56 trillion, a 20% annual jump.
Nominal GDP growth in the first two quarters averaged 8.85% against the 10.5% growth forecast for the full year in the union budget, as per data released last month by the statistics ministry.
The buoyancy in tax revenue collection is also seen as a result of efficiency in tax collection.
Use of advanced technology, particularly AI, is playing a significant role in improving tax administration and voluntary compliance in terms of correct disclosures of income sources, particularly foreign assets, said Amit Maheshwari, tax partner at consulting firm AKM Global.
“The last few years have seen a buoyant capital market and taxpayers have been eventually paying high capital gains tax on it,” he said. “[Also] tax authorities are increasingly using technology to match income declared in ITRs with information from various sources like banks, financial institutions, and property registrars.”
Maheshwari said, “Increased tax collections is a positive sign for the country as the government can have more funds to spend on public projects.”
The Income Tax department on Tuesday launched a new campaign to boost tax compliance by sending text messages and emails asking assessees to correct mismatches between the information the authority has about the transactions done by them and what has been disclosed in their tax returns.
Also, the department will reach out to those who have been found to have done high-value transactions but have not filed their tax returns. The last date to file these revised or belated tax returns for FY24 is 31 December 31, Central Board of Direct Taxes (CBDT) said on Tuesday.
Meanwhile, data also showed that securities transaction tax (STT) collection so far this year has touched ?40,114 crore, showing an 85% improvement over a year earlier.
STT is collected on the sale and purchase of equity, derivatives and equity oriented mutual funds and unlisted shares sold as part of a public offer, which would subsequently get listed on the bourses. The rate of tax varies from 0.001% to 0.2% depending on the class of security.
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