Economic contraction easing? Direct tax mop-up down, but not like earlier

At 23 per cent, decline in collection was slightly better than 30 per cent seen a fortnight ago, provisional data show

The rate of contraction in direct tax collection has reduced thanks to the payment of the second installment of advance tax, indicating a gradual revival of economic activity in some sectors in the current quarter.

Direct tax collections, net of refunds, declined by 22.6 per cent year-on-year (YoY) as of September 15, compared to a 30 per cent contraction till September 2. The decline in gross direct tax collections slowed to 16 per cent from the 21 per cent reported about a fortnight ago.

Although the deadline for paying the second installment of advance tax ended on Tuesday, the final