Apr-Dec advance tax collection increases 7.5%
In December it rose by 10.44%
In a clear reflection of a slowdown in the economy, the Centre’s advance tax collections in the past nine months leading to December showed a growth of only 7.52 per cent year-on-year.
The collections, however, grew 10.44 per cent to Rs 78,226 crore in the month of December alone, a finance ministry statement said.
This includes 7 per cent growth in corporate tax and 12.3 per cent in personal Income Tax. The rise is advance tax collection at 7.52 per cent during the quarter was lower than the annual increase of 15 per cent in direct taxes that is envisaged for the current fiscal in the budget.
Advance tax payment is a reflection of performance of the economy and lower collection suggests lower profitability. The economic growth rate in the first half of the current fiscal was 5.4 per cent as against 7.3 per cent in the same period in previous fiscal.
Advance tax is the income tax payable if one’s tax liability exceeds Rs 10,000 in a financial year. Advance tax is applicable only when an individual has sources of income other than his or her salary. For instance, if one is earning through capital gains, interest on investments, lottery, house property or any other business.
The growth in advance tax collections in December may have followed government’s stern warning to tax evaders earlier this month to either disclose their correct income and pay advance tax by December 15 or be prepared to face action. Finance Minister P Chidambaram had earlier said that Income Tax Department will adopt a non-adversarial approach in realising the direct tax target of Rs 5.70 lakh crore for 2012-13.