NET DIRECT TAX

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Context

• India’s net direct tax collections have risen 17.63% in 2022-23 to touch ₹16.61 lakh crore, as per provisional data released by the Finance Ministry.

Read about Direct Taxes: https://www.iasgyan.in/daily-current-affairs/direct-taxes-11

Sector-wise contribution

Corporate Tax Collections

• The contribution of corporate tax collections in the gross direct tax kitty was ₹10.04 lakh crore.
• Corporate tax accounted for just 51.1% in the year gone by as opposed to 52.6% in 2021-22

Personal Income Tax and Securities Transaction Tax

• ₹9.61 lakh crore has been paid by taxpayers as personal Income Tax and Securities Transaction Tax (STT).
• At a gross level, the share of personal income tax and STT to the tax kitty has touched 48.9% in 2022-23 compared to around 47.4% in 2021-22.

Gross Tax collections

• Gross tax collections grew 20.33% to ₹19.68 lakh crore in 2022-23, compared to ₹16.36 lakh crore in the previous financial year.

Tax refunds

• Tax refunds jumped at a sharper 37.4% year-on-year to a little over ₹3.07 lakh crore from ₹2,23,658 crore in 2021-22.

Higher growth in Tax Collections

• Gross corporate and personal tax collections along with STT, have put 2021-22 collections from these taxes at ₹16.32 lakh crore and the 2022-23 kitty at about ₹19.65 lakh crore, signaling a higher 20.38% growth.
• The Budget Estimates [BE] for direct tax revenue in the Union Budget for FY 2022-23 were fixed at ₹14.20 lakh crore which were revised and the Revised Estimates [RE] were fixed at ₹16.50 lakh crore. The provisional direct tax collections [net of the refunds] have exceeded the BE by 16.97% and RE by 0.69%.
• Net direct tax collections had grown a little over 49% to ₹14.12 lakh crore in 2021-22. As of March 10, 2023, the net direct tax kitty had grown around 16.8% to ₹13.73 lakh crore over the corresponding period of last year.
• The provisional growth rate of 17.6% is good and high and surprising to most analysts.

Closing Remark

• The momentum is certainly welcome as it should lead to greater confidence in the outlook for the new financial year.

https://www.thehindu.com/business/Economy/net-direct-tax-collections-up-1763-exceed-revised-estimates-target/article66696101.ece