Nearly 50% Jump In Direct Tax Collections This Year; Highest On Record Says CBDT Chief

Tax collections from personal and corporate income jumped nearly 50 per cent in the current fiscal year so far, with over a 40 per cent surge in advance tax payments, underscoring a healthy economic recovery from the pandemic spanning two waves of coronavirus infections.

That should give the government some breathing space to fund its expenditure plans after the Life Insurance Corporation’s (LIC) Initial Public Offering (IPO) was pushed from March to the next fiscal. However, it could still come in April.

The escalating Russia-Ukraine conflict has whiplashed financial markets, with the uncertainty pushing the government to delay the LIC’s much-awaited mega IPO.

Net collections of direct taxes until March 16, 2022, in the current fiscal year that started on April 1, 2021, stood at ₹ 13.63 lakh crore compared to ₹ 9.18 lakh crore in the same period a year back, the CBDT statement said.

The Central Board of Direct Taxes (CBDT) chairman J B Mohapatra called it the highest collection in history by the Income Tax department.

“In the block of last four years, the net collection numbers are the highest. It beats the previous high by as much as 2.5 lakh crore. This is the highest number of income tax collections thus far in the history of the department,” CBDT Chairman JB Mohapatra told PTI.

The net collections under direct taxes, which is made up of income tax on individual income, corporation tax on profits of companies, property tax, inheritance tax and gift tax, in the current fiscal are 35 per cent higher than the collection of ₹ 9.56 lakh crore in the pre-pandemic year of 2019-20 (April 2019 to March 2020).

Advance tax collections, the fourth instalment of which was due on March 15, rose to ₹ 6.62 lakh crore, up 40.75 per cent, the statement said, adding refunds aggregating to ₹ 1.87 lakh crore have been issued in the current fiscal.

Almost 53 per cent of all direct tax collection was from corporate tax, while 47 per cent came from personal income tax, including securities transaction tax (STT) on shares.

The direct tax collections exceeded the budgeted ₹ 11.08 lakh crore before the start of the fiscal and ₹ 12.50 lakh crore revised estimates in Finance Minister Nirmala Sitharaman’s Budget for 2022-23 presented on February 1.

The spread of the pandemic and the ensuing restrictions had impacted business activities in 2020-21. Towards the end of that fiscal, the economy had started to recover from the impact but was hit again by the second wave in April-May 2021 and a more recent third wave.

The rapid containment of Omicron, vaccination and declines in new infections helped the recovery.

“The figures of direct tax collections for the financial year 2021-22, as of March 16, 2022, show that net collections are at ₹ 13,63,038.3 crore compared to ₹ 9,18,430.5 crore over the corresponding period of the preceding financial year, i.e. FY 2020-21, representing an increase of 48.41 per cent,” the statement.

The net collection in the current fiscal registered a growth of 42.50 per cent over the corresponding period of FY 2019-20 when the net collection was ₹ 9,56,550.3 crore and a growth of 34.96 per cent over the same period of FY 2018-19 when the net collection was ₹ 10,09,982.9 crore.

The net direct tax collections include corporate income tax (CIT) of ₹ 7,19,035.0 crore (net of refund) and personal income tax (PIT) including STT of ₹ 6,40,588.3 crore (net of refund).

The gross collection of direct taxes (before adjusting for refunds) for the FY 2021-22 (as of March 16, 2022) stood at ₹ 15,50,364.2 crore compared to ₹ 11,20,638.6 crore in the corresponding period of the preceding financial year.

The gross collection for the FY 2019-20 was ₹ 11,34,706.3 crore and that for FY 2018-19 was ₹ 11,68,048.7 crore.

The gross collection includes CIT of ₹ 8,36,838.2 crore and PIT of ₹ 7,10,056.8 crore.

“Minor head wise collection (as of March 16, 2022), comprises advance tax of ₹ 6,62,896.3 crore, tax deducted at source of ₹ 6,86,798.7 crore, self-assessment tax of ₹ 1,34,391.1 crore; regular assessment tax of ₹ 55,249.5 crore; dividend distribution tax of ₹ 7,486.6 crore and tax under other minor heads of ₹ 3,542.1 crore,” the statement said.

The cumulative advance tax collections for the current 2021-22 fiscal stood at ₹ 6,62,896.3 crore as of March 16, 2022, as compared to ₹ 4,70,984.4 crore for the corresponding period of the immediately preceding financial year.

This was 50.5 per cent higher than ₹ 4,40,281.4 crore advance tax collection in FY 2019-20, and 31 per cent more than ₹ 5,06,714.2 crore mopped up in 2018-19.

The advance tax figure of ₹ 6,62,896.3 crore comprises CIT of ₹ 4,84,451.8 crore and PIT of ₹ 1,78,441.1 crore. “This amount is expected to increase as further information is awaited from banks,” the statement added.

Refunds amounting to ₹ 1,87,325.9 crore have also been issued in FY 2021-22 so far.