Direct tax collections exceed 52% of FY23 Budget target

Exhibiting a healthy growth in tax revenues, India’s net direct tax collection at Rs 7.45 lakh crore between April 1 and October 8 surpassed over 52 per cent of the Budget estimates of the current financial year (2022-23).

Net direct tax is gross collections minus the refund.

The Union Budget this year had set the direct tax collection target at Rs 14.20 lakh crore for the financial year ending March 2023.

The gross direct tax collections for the period under review stood at Rs 9.98 lakh crore, which is 23 per cent higher than gross collections last year.

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Experts said strong economic growth coupled with better reporting seems to be supporting the collection figures.

“Direct Tax collections up to October 8, 2022 show that gross collections are at Rs 8.98 lakh crore which is 23.8 per cent higher than the gross collections for the corresponding period of last year.

“Direct Tax collection, net of refunds, stands at Rs 7.45 lakh crore which is 16.3% higher than the net collections for the corresponding period of last year. This collection is 52.46 per cent of the total Budget Estimates of Direct Taxes for FY 2022-23, the finance ministry said.

Direct tax includes personal and corporate income tax.

Refunds amounting to Rs 1.53 lakh crore have been issued during April 1 and October 8, which are 81.0 per cent higher than refunds issued during the same period in the preceding year, data showed.

“With inflation reportedly running between 6-7 per cent, it is imperative that the tax collections show a healthy growth above inflation rate. Strong economic growth coupled with better reporting seems to be supporting the collection figures. While the collections remain strong, the same also needs to be supported by corporate investment cycles reviving post-Covid numbers,” said Rohinton Sidhwa, partner, Deloitte India.