Net Direct Tax Collections Rise Most In Four Years
The government’s net direct tax collection for first nine and a half months of the current fiscal, grew at its fastest pace in the last four years.
Net direct tax collection rose nearly 19 percent to Rs 6.89 lakh crore as on Jan 15, the CBDT said in a media statement today. With this, the government has achieved about 70 percent of its Rs 9.8 lakh crore target set in the Union Budget for fiscal 2017-18.
The net direct tax collected between April 2014 and January 2015 rose 6.2 percent to Rs 4.74 lakh crore, as compared to first nine month period of the previous fiscal, according to data on the Central Board of Direct Taxes’ website.
Subsequently, direct tax mop-up rose nearly 11 percent for the April-January 2016 period and another 11 percent for the corresponding nine months of the next fiscal.
This year, the rise was backed by a 13 percent year-on-year growth in advance tax collections to Rs 3.18 lakh crore as on Dec. 31, 2017, and an 18.2 percent increase in net corporate income tax as on Jan. 15.
Gross collections (before adjusting for refunds) increased by 13.5 percent to Rs 8.11 lakh crore during April, 2017 to Jan. 15, 2018. Refunds amounting to Rs 1.22 lakh crore were issued during this period.
Tax collections have been increasing as the government’s tax base has widened, primarily due to measures such as demonetisation and reforms such as the Goods and Services Tax, Riaz Thingna, director at Grant Thornton Advisory told BloombergQuint.
In the short run, greater inclusiveness will arise from the implementation of GST as more small businesses are becoming a part of the formal economy. This will have a trickle-down effect on direct taxes.Riaz Thingna, Director, Grant Thornton Advisory
With the rise in industrial growth, the trend of growing tax collections is likely to continue in the near future, Thingna added.