A look into the reasons for the strong personal income tax collection in Q1

In a quarter affected by the second wave, India saw record personal income tax collection at nearly twice that collected in Q1FY21, and 26% more than Q1FY20

Tax collection by the central government in the April-June quarter (Q1) of the current financial year came in at a record high. Gross tax collection stood at Rs 5.36 trillion, and it could well be at the level of 11 per cent of gross domestic product, if we assume that nominal GDP grew by 24 per cent in Q1. This is the highest ever. 

Tax revenue from all sources grew strongly in Q1, according to finance ministry’s provisional accounts. While growth in excise duties can be attributed to retention in high fuel taxes in times of growing demand, good corporate