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Direct tax kitty gathers steam, up 20.25% by February 10

Growth in the Personal Income Tax revenues continued to outstrip Corporate Income Tax. Representational
| Photo Credit: C. Venkatachalapathy

India’s net direct tax collections picked up pace over the past month to rise 20.25% year-on-year by February 10, compared to a 19.4% uptick on the same date in January, as per data released by the Finance Ministry on Sunday.

Growth in the Personal Income Tax (PIT) revenues continued to outstrip Corporate Income Tax (CIT), with a 26.91% uptick in net PIT collections vis-à-vis a 13.6% rise in CIT inflows so far this year.

From ₹14.7 lakh crore on January 10, net direct tax collections, that are calculated by deducting refunds from gross tax inflows, had hit ₹15.6 lakh crore by Saturday, constituting 80.23% of the revised estimates for direct taxes for this year.

Higher direct tax expectations

Finance Minister Nirmala Sitharaman, in her Interim Budget for 2024-25, had raised her hopes for the direct tax kitty for this year, pegging revised estimates at ₹19.5 lakh crore, from the ₹18.23 lakh crore originally estimated for 2023-24.

“We are quite hopeful of meeting the Revised Estimates for the current year, as the asking rate is 17% growth for the next two months. But we don’t know how Advance Tax will come through, so let us see how much we are able to achieve because it is the product of the collections which will be made in the month of February and March and refunds which will be issued,” Central Board of Direct Taxes chairperson Nitin Gupta told The Hindu in an interview last week.

“The provisional figures of direct tax collections continue to register steady growth. Direct tax collections up to February 10, 2024 show that gross collections are at ₹18.38 lakh crore, which is 17.30% higher than the gross collections for the corresponding period of last year,” the Ministry said in a statement.

Rising refunds

“Refunds amounting to ₹2.77 lakh crore have been issued [between] April 1, 2023 [and] February 10, 2024,” it added.

“We are issuing refunds and intend to keep issuing refunds as they arise. So let us see; every year, we are seeing refunds rising. The year before last, it was ₹2.25 lakh crore and last year, it rose to ₹3.07 lakh crore,” Mr. Gupta said, adding that the Board was also trying to process and give quick effect to appellate orders on tax demands, which are likely to pick up in the remaining period of this financial year.

Prior to refunds, gross revenue collections from corporate income tax were 9.2% higher than a year ago, while revenues from personal income tax were up 25.7%. Growth in PIT collections, when combined with the Securities Transaction Tax (STT) receipts, stood at 25.93% at the gross level, while it was 27.2% after making refund adjustments.

As of January 10, the net growth in CIT collections was 12.37%, while PIT revenues, excluding STT receipts, were up 27.26%.

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