Direct taxes mop up after refunds in FY24 at Rs 13.7 trn till Dec 17

It was backed by a 20% increase in advance tax revenues

Direct tax collections after refunds grew 20.66 per cent to Rs 13.7 trillion till December 17 of the current financial year compared to Rs 11.36 trillion during the same period of the previous financial year. It was backed by a 20 per cent increase in advance tax revenues.

This reflected economic recovery as well as improved administrative skills of the tax department.
  

With this, direct taxes have yielded a bit over three-fourths of the Budget Estimates (BE) at Rs 18.23 trillion for 2023-24. With around three-and-a-half months still remaining for the financial year to end, the projection for direct tax mop up would be easily exceeded.

The Budget has projected 11.57 per cent rise in direct tax collections for 2023-24.
 

This, together with robust goods and services tax (GST) collections, would provide the government enough ammunition after devolution to the states to rein in the fiscal deficit at the required 5.9 per cent of GDP. This is despite dwindling disinvestment receipts, excise duty collections and higher subsidy bill than budgeted in the current financial year.  
 

The direct tax receipts included corporation tax revenues at Rs 6.95 trillion and personal income tax, including securities transaction tax (STT) at Rs 6.73 trillion. Corporation tax kitty constituted 75.30 per cent of the BE at Rs 9.23 trillion. And, personal income tax accounted for 74.72 per cent of the BE at over Rs 9 trillion for FY24.
 

Direct tax revenues before refunds stood at Rs 15.96 trillion, an increase of 17.01 per cent over the corresponding period of FY23. R

efunds amounting to Rs 2.25 trillion were issued till December 17 of this year.

 

Gross direct collection includes corporation tax at Rs 7.90 trillion and personal income tax, including STT, at Rs 8.02 trillion. This included advance tax collections at Rs 6.25 trillion during the period, which was a rise of 19.94 per cent from Rs 5.21 trillion a year ago.

Advance tax collection comprised corporation tax at Rs 4.82 trillion and personal income tax at Rs 1.43 trillion.
 

Tax deducted at source (TDS) stood at Rs 7.71 trillion — self-assessment at Rs 1.49 trillion and regular assessment tax of Rs 36,651 crore. Tax under other minor heads was Rs 14,455 crore during the period.
 

The economy grew at a higher-than-expected 7.6 per cent during the second quarter, after a robust 7.8 per cent growth in the first quarter.

After the second quarter data, high frequency indicators showed continued economic recovery. Backed by this, the Monetary Policy Committee (MPC) raised economic growth projections to seven per cent from the earlier 6.5 per cent for 2023-24.