Net income tax mop-up in FY22 at Rs 7.4 trn, Rajya Sabha informed

The Centre’s net income tax revenue from April to December 7 stood at Rs 7.39 trillion, minister of state (MoS) for finance Pankaj Chaudhary informed the Rajya Sabha on Tuesday.

This includes Rs 3.63 trillion of corporate taxes, Rs 3.61 trillion of personal income tax and Rs 15,375 crore of other income taxes, including securities transaction tax (STT). In a written reply, the MoS said net income tax collections in lockdown-hit FY21 were Rs 9.45 trillion. Collections during the pre-pandemic year (FY20) were Rs 10.51 trillion. In FY19, the mop up was Rs 11.38 trillion.

With nearly four months left for the fiscal year to end, collections till December 7 were nearly 80 per cent of full year collections of FY21 and 70 per cent of FY20. Hence, this shows some encouraging signs of recovery.

Budget makers are confident that the net tax collection’s budgeted target (direct plus indirect) of Rs 15.45 trillion will be exceeded. Gross goods and services tax (gross GST) collections for November had come in at Rs 1.32 trillion, the second-highest not only this year, but since introduction of the nationwide tax. According to another reply by the finance ministry in the Rajya Sabha, total gross GST collections for April-Nove­mber were Rs 7.02 trillion, compared with Rs 8.66 trillion in the whole of FY21 and Rs 9.44 trillion in FY20.

However, in spite of encouraging tax collections, there are concerns that the fiscal deficit target of 6.8 per cent of GDP for the year may still not be met.  This is due to higher-than-budgeted expenditure caused by higher fertiliser subsidy burden, extension of the free-food programme, measures announced to spur growth and additional spending on vaccination procurement. Back-of-the-envelope calculations show that the additional expenditure for the year could be over Rs 2.5 trillion already. There are concerns that the divestment target of Rs 1.75 trillion may not be met.