Note ban puzzle in tax collections

A look at the Budget’s indirect tax numbers suggests that the finance minister has factored in an economic slowdown in the fourth quarter of the current financial year due to demonetisation.

Yet, on the direct tax side, for corporate and personal income tax, the Budget Estimates are identical to the Revised Estimates. This suggests that the government may not have accounted for a possible windfall in direct tax collections from the income disclosure schemes launched after demonetisation.

According to the Budget documents, Union excise duty collections are pegged to grow at 34.5 per cent in FY17, putting total collections at