India’s Direct Tax Collections Rise 3% In April-October
Net direct tax collected between April and October stood at Rs 5.2 lakh crore.
India’s net direct tax collection for the first seven months of the ongoing financial year grew 2.7 percent year-on-year against the government’s projected target of 17 percent annual growth in FY20.
Net direct tax collected between April and October stood at Rs 5.2 lakh crore, Bloomberg reported. That compares with the Rs 5.07 lakh-crore net direct tax collection for April-October 2018.
The government expects to collect Rs 13.35 lakh crore in direct taxes this year, which was revised lower from Rs 13.80 lakh crore projected in the interim budget presented in February. That’s a 17 percent rise from the Rs 11.40 lakh crore collected in 2018-19, according to data on the website of Comptroller General of Accounts.
On a gross basis, tax collections rose 5 percent year-on-year to Rs 6.5 lakh crore during the same period, Bloomberg reported citing an official it didn’t identify.
The deceleration in economic growth may be the prime cause for the muted growth in direct tax collection in the first seven months, said Pranav Sayta, partner at EY India.
The government is staring at a revenue shortfall of over Rs 1 lakh crore against the target of Rs 13.35 lakh crore for financial year 2019-20, Satya said. The shortfall in revenue collection will have an adverse impact on the fiscal deficit for the year which, to some extent, could be addressed by enhanced divestment and other non-tax revenue, he said.
The shortfall in tax revenue has kept the government away from cutting personal income tax rates at a time when the economy is going through a consumption slowdown. In September, the government had announced a near-10 percentage point cut in corporate taxes that is expected to cost Rs 1.45 lakh crore to the exchequer.