During the April-July period, the central government achieved more than a third of the direct tax collection for this financial year as personal tax collection exceeded corporation tax mop-up amid tightened enforcement and compliance measures, according to official figures.
Overall direct tax collections, net of refunds, including corporation and personal income tax, grew by 40 per cent in the first four months of FY23 to Rs 5 trillion, which is nearly 35 per cent of the target of Rs 14.2 trillion for the whole fiscal year, a report by Livemint stated.
Meanwhile, direct tax refunds increased by 38 per cent to Rs 67,000 crore.
As the central government has cut taxes on petrol and diesel to tame rising rates driven by a spike in global crude prices, robust direct tax collections will help the government bridge the shortfall in indirect taxes.
Personal income tax collection posted a growth of 52 per cent YoY at Rs 2.67 trillion, while corporation tax collection stood at Rs 45,000 crore.
The government officials attributed the rise in direct tax collections to tightened enforcement and compliance using technology including the use of the Annual Information Statement (AIS).
Introduced last year, the AIS provides comprehensive information to taxpayers on their financial transactions. The purpose of the new AIS is to make it easier for taxpayers to file their returns.
“We have seen a sharp increase in self-assessment tax mop up, which could be a result of the introduction of AIS and data collection from different source agencies,” said a government official, quoted Livemint.
Self-assessment tax jumped 275 per cent to Rs 43,500 crore in the April-July period, while personal income tax collection stood at 38 per cent of the FY23 budget target of Rs 7 trillion.
On the other hand, corporation tax collection was up by 32 per cent to Rs 2.2 trillion, against Rs 6.73 trillion of personal income tax.
Source: Business Standard