Direct Tax Collection exceeds 95.2% of FY23 Revised Estimates

Net direct tax collection (after calculating refunds) increased 15.3 percent to 15.72 trillion so far this financial year, according to sources.

Direct Tax Collection exceeds 95.2%

Reetu | Mar 18, 2023 | Views

Direct Tax Collection exceeds 95.2% of FY23 Revised Estimates

Direct Tax Collection exceeds 95.2% of FY23 Revised Estimates

Net direct tax collection (after calculating refunds) increased 15.3 percent to 15.72 trillion so far this financial year, according sources.

With this, tax collection is 95.2 percent of the revised target of 16.5 trillion and 10% higher than the Budget Forecast of 14.2 trillion.

On a net basis, corporate tax collection was 8.11 trillion as of March 16, while personal income tax collection was 7.32 trillion. They include 7.40 trillion in advance tax collection.

The collection of securities transaction tax stands at 24,093 crore, compared to the revised target of 25,000 crore.

“We are accumulating the advance tax received in the fourth and final quarters of the financial year. The results for March 16 include 60% of the advance tax owed. The remaining 40% will be reflected by March 18-19, according to an official.

“According to the March 16 compilation, we are only 78,821 crore (or 5%) shy of the Revised Estimate of 16.5 trillion. Because the fourth advance tax installment has yet to arrive in full, the figures are likely to be revised upward,” he noted. The deadline for the final advance tax collection installment was March 15.

The Central Board of Direct Taxes (CBDT), an apex body for direct tax matters, is set to undertake a pan-Indian review of tax collection in FY23 through video-conferencing on March 20, according to another official familiar with the subject.

Due to quarterly and yearly closures, tax collection typically jumps dramatically in March.

“Revenue is anticipated to grow higher because many companies pay the entire tax in the fourth instalment, making up for any deficiency in the first three instalments. Also, enforcement actions to recover unpaid tax demand improve revenue collection,” the officer explained.

Instead of at the conclusion of the financial year, advance tax is paid in four installments. It is seen as an indicator of economic sentiment. The first installment, or 15% of advance tax, is due by June 15, the second by September 15 (30%), the third by December 15 (30%), and the remainder by March 15.

The direct tax projection for FY23, which includes individual and corporate tax, has been revised upward and is now expected to increase by more than 17% to 16.5 trillion, up from 14.08 trillion previously estimated.

Significantly, the Union Budget for February projects tax collection of 33.6 trillion, which is 10.4% more than the Revised Estimate for FY23 of 30.4 trillion.

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