Direct tax collection jumps 24 pc in first half of FY23

New Delhi: Gross collection of tax on corporate and individual earnings jumped nearly 24 percent so far in the current fiscal year that started on April 1, the tax department said on Sunday.

The gross collection of taxes on corporate earnings rose 16.74 percent from April 1 to October 8, while personal income tax collection jumped 32.30 percent, the tax department said in a statement.

Direct tax collection came at Rs 8.98 lakh crore between April 1 to October 8, 2022, 23.8 percent higher than the gross collection in the corresponding period a year ago.

Tax on corporate and individual income makes up for direct taxes.

After adjusting refunds, direct tax collection stood at Rs 7.45 lakh crore, 16.3 percent higher than the net collection for the corresponding period a year ago, the statement said.

“This collection is 52.46 percent of the total Budget Estimates of Direct Taxes for FY 2022-23,” it added.

Tax collection is an indicator of economic activity in any country. But in India, the robust tax collection was despite a slowdown in industrial production and exports. Some analysts believe that economic growth has lost momentum but corporate profits are keeping the engine running.

The Reserve Bank of India (RBI) last month cut its production of India’s GDP growth in the current fiscal to 7 percent from 7.2 percent previously estimated. Other rating agencies too have lowered the economic growth projection for India citing the impact of geopolitical tensions, tightening global financial conditions, and slowing external demand.

“So far as the growth rate for corporate income tax (CIT) and personal income tax (PIT) in terms of gross revenue collection is concerned, the growth rate for CIT is 16.73 percent, while that for PIT (including STT) is 32.30 percent,” the Central Board of Direct Taxes (CBDT) said.

After the adjustment of refunds, the net growth in CIT collection was 16.29 percent, and that in PIT collection was 17.35 percent (PIT only)/16.25 percent (PIT including STT).

Refunds amounting to Rs 1.53 lakh crore have been issued during the period April 1, 2022, to October 8, 2022, 81 percent higher than the refunds issued during the same period in the preceding year, it added.

Merchandise exports have lost on the momentum of last year’s surge and shrunk by 3.5 percent in September. The trade deficit has nearly doubled in the first six months. IIP growth was subdued at 2.4 percent in July while the ‘core sector’ hit a nine-month low of 3.3 percent in August.

Collection from levy of tax on goods and services sold (GST) has flattened at around Rs 1.45-1.46 lakh crore per month.