Net direct tax collections doubled during the first two-and-half months of the current financial year, according to data released by the Ministry of Finance on Wednesday. The boom in collections can be partly attributed to low base effect, but the unprecedented 100 per cent growth has come at a time when the second wave of COVID-19 has swept through most of the country, overwhelming medical infrastructure and forcing lockdowns that brought most industrial activity to a halt.
According to the ministry, net direct tax collection was ₹1,85,871 crore till June 15, as compared to ₹92,762 crore over the corresponding period of the preceding year. This represents an increase of 100.4 per cent, the ministry said in a statement. This includes corporation tax of ₹74,356 crore (net of refund) and personal income tax, including securities transaction tax at ₹1,11,043 crore (net of refund).
The gross collection of direct taxes (before adjusting for refunds) for 2021-22 stands at ₹2,16,602 crore compared to ₹1,37,825 crore in the corresponding period of the preceding year. This includes corporation tax of ₹96,923 crore and personal income tax, including securities transaction tax, of ₹1,19,197 crore.
Advance tax collection during the period was ₹28,780 crore, while tax deducted at source was ₹1,56,824 crore, the ministry said. Self-assessment tax was ₹15,343 crore while regular assessment tax was ₹14,079 crore. Dividend distribution tax collection amounted to ₹1,086 crore and tax under other minor heads is estimated at ₹491 crore.
Despite extremely challenging initial months of the current fiscal, advance tax collections for the first quarter of 2021-22 stands at ₹28,780 crore against advance tax collections of ₹1,714 crore for the corresponding period of the previous financial year, showing a growth of approximately 146 per cent. This comprises corporation tax of ₹18,358 crore and personal income tax at ₹10,422 crore. This amount is expected to increase as further information is received from banks, the ministry said. Refunds amounting to ₹30,731 crore have also been issued so far during the current fiscal.
The positive tax collection data comes at a time when economic projections are being revised downwards due to the crippling effect of the second wave of COVID-19 pandemic. After the Indian economy plunged into negative growth during the previous fiscal due to COVID-19 effect, it was felt that it would register double-digit growth during the current fiscal. However, the lockdowns during March, April and May have led to toning down of the growth projections even as inflation is on the rise.