Direct tax collection hits 95.2% of Revised Estimates for FY23
Net direct tax collection (after adjusting refunds) rose 15.3 per cent to ₹15.72 trillion till March 16 this fiscal year so far, buoyed by an upsurge in advance tax mop-up, people close to the development told Business Standard.
With this, tax collection is 95.2 per cent of the revised target of ₹16.5 trillion and 10 per cent above the Budget Estimate of ₹14.2 trillion.
As on March 16, on a net basis, corporate tax collection stood at ₹8.11 trillion and personal income tax ₹7.32 trillion.
These include the advance tax collection of ₹7.40 trillion.
Securities transaction tax collection is at ₹24,093 crore against the revised target of ₹25,000 crore.
“We are in the process of compiling the advance tax received in the fourth and last quarter of the fiscal year. The March 16 figures include 60 per cent of the advance tax due. The remaining 40 per cent will reflect by March 18-19,” an official said.
“Based on the March 16 compilation, we are short of just ₹78,821 crore (or 5 per cent) of the Revised Estimate of ₹16.5 trillion. Since the fourth instalment of advance tax is yet to arrive fully, there is a high probability of the numbers getting revised upward,” he added.
The deadline for the final instalment of advance tax collection was March 15.
The Central Board of Direct taxes (CBDT), an apex body for direct tax matters, on March 20 expected to conduct a pan-Indian review of tax collection in FY23 over video-conferencing, another official privy to the matter said.
Usually in March, tax collection increases remarkably owing to quarterly and yearly closures.
“Revenue is likely to go up because many companies pay the entire tax in the fourth instalment, making up for any shortfall in the first three instalments. Moreover, enforcement efforts to recover outstanding tax demand further optimise revenue collection,” the officer said.
Advance tax is paid in four instalments, instead of at the end of the fiscal year. It is considered an indication of economic sentiment. The first instalment, or 15 per cent of advance tax, is to be paid by June 15, the second by September 15 (30 per cent), the third by December 15 (30 per cent), and the rest by March 15.
For FY23, the projection of direct tax, which includes individual and corporate tax, has been revised upward and is expected to grow by over 17 per cent to ₹16.5 trillion from ₹14.08 trillion estimated earlier.
Notably, the Union Budget in February pegs tax revenue at ₹33.6 trillion, which is 10.4 per cent higher than the ₹30.4 trillion projected in the Revised Estimate for FY23.