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Direct tax collection up 16% from last year, growth in advance tax down

Net direct tax collections for April-September, the first half of the current financial year, grew 15.8 per cent from last year to Rs 3.86 lakh crore, data released by Central Board of Direct Taxes (CBDT) showed. This amounts to 39.4 per cent of the total Budget estimate for direct taxes for 2017-18.

The rise in direct tax collections was primarily driven by a 11.5 per cent growth in advance tax collections that were recorded at Rs 1.77 lakh crore up to September 30. The growth in advance tax, however, has been slower than during the April-September period last year, when it had recorded an increase of 12.12 per cent.

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Advance tax for corporate income tax grew 8.1 per cent year-on-year between April and September this year, while that for personal income tax rose 30.1 per cent, though the Finance ministry release did not mention whether these are gross figures or net figures, after adjusting for refunds.

Refunds amounting to Rs 79,660 crore were issued during April-September, but the release did not specify whether it’s an increase or decrease from last year. Gross direct tax collections (before adjusting for refunds) increased by 10.3 per cent to Rs 4.66 lakh crore during April-September.

Last year, during April-September, gross collection of corporate income tax grew 9.54 per cent while personal income tax had risen 16.85 per cent. After adjusting for refunds, the net growth in corporate income tax collections was 2.56 per cent, while personal income tax collections recorded a rise of 18.6 per cent. Refunds amounting to Rs 86,491 crore were issued during April-September 2016, up 26.99 per cent from a year ago.

The Finance ministry’s release last month for the April-August period had stated that net corporate income tax collections grew 18.1 per cent from the same period last year and gross collections grew 5 per cent year-on-year.

Personal Income tax rose 16 per cent during April-August and after adjusting for refunds, the net growth in personal income tax collections had been 16.5 per cent. Refunds amounting to Rs 74,089 crore were issued during April-August, 7.2 per cent lower than the corresponding period last year.

The release did not mention whether the last installment of tax and penalties under the Income Declaration Scheme, which was the government’s first tax compliance window from June 1-September 30 last year, have been included in the overall direct tax collections. The IDS had garnered around Rs 12,700 crore through two installments of tax and penalties in 2016-17. An equal amount was expected to flow into government coffers this year but the actual amount may be lower as many paid more last year.

Last month, Finance Minister Arun Jaitley, while addressing the second meeting of the parliamentary consultative committee attached to the finance ministry on ‘Initiatives of IT Department’, had highlighted the benefits of demonetisation and said that the net direct tax collections up to September 18 in the current financial year rose 15.7 per cent to Rs 3.7 lakh crore.

In August, the government said that the rise in direct tax collections was reflective of the positive effects of demonetisation. Collection of advance tax under personal income tax as on August 5 had registered a growth of about 41.79 per cent over the corresponding period in last fiscal, while collection of Self-Assessment Tax under personal income tax had recorded a growth of 34.25 per cent from the same period last year.

In April-September of last financial year, 2016-17, the direct tax collections had grown around 9 per cent to Rs 3.27 lakh crore. The government estimates to collect Rs 9.80 lakh crore from direct taxes in the current fiscal.


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