Centre’s net direct tax collection reaches 80% of budget estimate

Advance Tax collections for the current fiscal after the December instalment stood at ₹5.2 trillion, showing a growth of nearly 13%, CBDT said.

The government had set a target of 14.2 trillion for direct tax receipts this year including corporation tax and personal income tax.

The Centre collected ₹6,06,679 crore in corporate tax and ₹5,26,477 crore in personal income tax including securities transaction tax (STT) upto 17 December, after taking into account tax refunds.So far this year, about ₹2.28 trillion of tax refunds have been given, the tax authority said.

Gross collection of direct taxes before adjusting for refunds stood at ₹13.6 trillion so far this year compared to ₹10.8 trillion in the same time a year ago, showing a 25.9% growth. Centre collected corporate tax of ₹7.25 trillion and personal income tax including STT of ₹6.36 trillion before refunds.

Tax deducted at source (TDS) of ₹6.45 trillion was the largest in terms of the mode of collection, followed by advance tax of ₹5.2 trillion, self assessment of ₹1.4 trillion and regular assessment of ₹46,244 crore. The numbers show the gradual expansion of TDS across various economic activities, which is proving to be an effective strategy for the government to ensure tax compliance. The advantage of TDS is that it is both a tax collection strategy as well as an information gathering tool.

The cumulative advance tax collections for the first, second and third quarter of FY 23 at ₹5.21 trillion shows nearly 13% improvement over what was collected in the same time a year ago. Advance tax receipts this year entails corporate tax of ₹3.97 trillion and personal income tax of ₹1.24 trillion.

“There has been a remarkable increase in the speed of processing of income tax returns filed during the current fiscal, with almost 96.5% of the duly verified income tax returns having been processed till 17 December. This has resulted in faster issue of refunds with almost a 109% increase in the number of refunds issued in the current financial year,” CBDT said.

Refunds amounting to ₹2.28 trillion have been issued so far this year against refund of ₹1.35 trillion in the same time a year ago, showing a growth of over 68.57%, CBDT said.