Digitization, new forms boost direct tax mop-up 23.5%

livemint.com:

NEW DELHI : The government has collected ₹8.65 trillion in direct taxes up to 16 September after accounting for tax refunds, making up more than half of its annual target, the Central Board of Direct Taxes (CBDT) said in a statement. Direct taxes collected so far, including the first two instalments of advance tax collections, show a 23.5% growth over the tax receipts from these sources a year ago, CBDT said. The Centre had projected a 10.5% annual growth in direct tax collection in the current fiscal year at ₹18.2 trillion.

After refunds, the tax authority collected ₹4.16 trillion in corporate tax revenue, accounting for 45% of the full-year target and ₹4.47 trillion in personal income tax revenue, representing half of the full-year target. Personal income tax collections include securities transaction tax levied on the sale of listed equity shares. Although the tax collection growth in the initial quarters appears way above the government’s full-year projections, experts believe it would converge with the government’s projections.

“The full-year tax collection figures are expected to pan out broadly in line with budget estimates. The tax collection growth seen in the initial quarters is expected to normalize as per budget projections by the end of the fiscal," said Sachchidanand Shukla, group chief economist at Larsen & Toubro Ltd. One has to be cognizant of the nominal GDP (gross domestic product) growth rate while looking at tax collection figures as the two are linked, said Shukla.