Direct tax collections top revised budget estimate by ₹1 lakh crore

Net direct tax collections till March 16 in the current fiscal year (FY22) stood at ₹13.63 lakh crore, a growth rate of over 48.4%, showed official data released on Thursday.

Advance tax collections for FY22, including the fourth installment in March, stood at ₹6.63 lakh crore, a growth rate of about 41%, underscoring the sustained economic recovery even after the second Covid-19 wave.

With 14 more days to go, officials expect the numbers to go up further.

“This amount is expected to increase as further information is awaited from banks. Refunds amounting to ₹1,87,325.9 crore have also been issued in FY22 so far,” the finance ministry said in a statement.

The Centre had budgeted direct tax collections of ₹11.08 lakh crore for FY22, which was revised to ₹12.50 lakh crore when the Budget for FY23 was presented in February.

“This has exceeded our expectations. This will offset against delay in divestment target and also provide cushion for additional spending,” a senior finance ministry official said.

Experts said the additional collections would help absorb a part of the third supplementary demand for grants.

“We had expected the direct tax collections to exceed the Revised Estimates by about ₹50,000 crore. So the number which is being released today is well higher than that and will help to absorb a part of the third supplementary expenditure demand for grants in terms of the higher expenditure,” Aditi Nayar, Chief Economist at ICRA, said.

The net direct tax collections include corporation tax at ₹7.19 lakh crore and personal income tax together with securities transaction tax at ₹6.40 lakh crore.

The gross collection of direct taxes for FY22 (as of March 16) stands at ₹15.50 lakh crore crore compared to ₹11.20 lakh crore in the corresponding period last fiscal year.

Of the gross tax collection, tax deducted at source was ₹6.87 lakh crore, self-assessment tax of ₹1.34 lakh crore, regular assessment tax of ₹55,249.5 crore; dividend distribution tax of ₹7,486.6 crore and tax under other minor heads of ₹3,542.1 crore.