Direct taxes jump, in lift for spending
₹10.6 trillion, official data released on Friday showed, creating additional spending room for the government in an election year. Provisional data till 9 November showed the government has so far collected 58% of the ₹18.2 trillion budgeted for FY24. Gross direct tax receipts (without adjusting for refunds of ₹1.77 trillion) were ₹12.37 trillion, 18% above last year’s ₹ 10.52 trillion.
Tax collections that are expected to beat budget estimates may help the government meet its fiscal deficit target and create space for welfare spending, economists said, despite limited progress on the disinvestment front. Gross goods and services tax (GST) revenues grew strongly in October, with tax collections rising at a 10-month-high pace of 13.4% to hit the second-highest monthly tally of ₹1.72 trillion. Direct tax collections may surpass budgetary estimates yet again, said Amit Singhania, partner, tax, Shardul Amarchand Mangaldas & Co.
Out of the total net direct tax collections, net corporate tax and personal income tax collections rose 12.5% and 32%, respectively. Net collection of personal income tax and securities transaction tax (STT) rose 31%. Net direct tax collections in FY23 stood at ₹ 16.61 trillion, up 17.6% from FY22’s ₹ 14.12 trillion, exceeding both budget and revised estimates.
In FY22, net direct tax collections reached ₹14.09 trillion against ₹ 9.45 trillion in the covid year of FY21, a growth of 49%. “While personal income tax collections are registering over a 30% growth, corporate income tax collections still need to pick up. A clearer picture should emerge once the filing season concludes at the end of November," said Rohinton Sidhwa, partner, Deloitte India.
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