Direct tax receipts soar 17.5% in April-August

Collections at Rs 2.24 lakh crore higher than government estimates

Direct taxes fetched 17.5 per cent higher receipts to the exchequer for the first five months (April-August) of the current financial year (FY18), more than what was projected for the entire financial year. However, the growth rate slowed in August.

Direct tax collections, net of refunds, stood at Rs 2.24 lakh crore during the April-August period of FY18.

The receipts had grown 19.1 per cent in the first four months of FY18.

The government had projected 9.8 lakh crore from the direct taxes — corporation tax and personal income tax — in 2017-18, which would be 15.7 per cent higher than Rs 8.47 lakh crore in FY17. Till August, 22.9 per cent of the target has been achieved.

After adjusting for refunds, the growth in corporation collections was at 18.1 per cent during the period, while personal income tax collections rose 16.5 per cent.

Before refunds, corporation tax collections were up five per cent, while personal income tax receipts went up 16 per cent, highlighting corporates are still struggling to recover, even as net collections are robust due to refunds.

A total of Rs 74,089 crore refunds were given by the government in this period.

The direct tax kitty is crucial to the government since the goods and services tax (GST) collections net of refunds dwindled in July, the first month of its roll-out. For close to Rs 95,000-crore revenue collected so far for July, around Rs 62,000 crore has been claimed as input tax credit for taxes paid for the period before July 1. The remaining amount will be distributed between the Centre and the states.

The indirect tax collection figures for the month of August is yet to come. The numbers are significant for the government since the Centre’s fiscal deficit has already crossed 92 per cent of the Budget target in just four months.