In a significant economic development, India’s net direct tax collection for the period spanning April 1 to September 16, 2023, has soared to an impressive Rs 8.65 lakh crore, marking a substantial year-on-year growth of 23.5%. This robust performance is expected to bolster government revenues, with corporate and excise tax collections poised to align with budgetary projections for the current fiscal year.
The comprehensive tax collection figure encompasses personal income tax contributions of Rs 4.47 lakh crore and corporate tax revenues of Rs 4.16 lakh crore, as confirmed by the Ministry of Finance. Moreover, during the ongoing fiscal year, the government has disbursed tax refunds totaling Rs 1.22 lakh crore.
Before factoring in refunds, the gross tax collections tallied an impressive Rs 9.87 lakh crore, registering a commendable 18.3% year-on-year increase. Financial services secretary Ajay Seth has expressed optimism that the combined proceeds from corporate and excise tax collections will align closely with budget estimates for the present fiscal year.
Nevertheless, it’s crucial to note that corporate tax, the second-largest component of direct taxes after personal income tax, along with excise duty collections, did experience a moderate decline of 10.4% in the initial four months of the current fiscal year.
This strong performance follows a period of muted tax collections in the first quarter, with a decline of over 14% compared to an impressive 26% surge in the corresponding period of the previous year.
For the fiscal year 2024, the government has set a formidable target of Rs 33.61 lakh crore, which represents a 10.1% increase from the Rs 30.54 lakh crore collected in the fiscal year 2023. To meet this ambitious target, gross tax collections will need to escalate by 12.9% on a year-on-year basis from August to March.
The subdued tax collections observed earlier have contributed to the widening of the fiscal deficit, which has reached 25.3% of the budgeted target in the first quarter of the fiscal year 2024, in contrast to the 21.2% witnessed during the same period in the previous year. This calls for prudent fiscal management in the coming months to ensure economic stability.
In summary, India’s direct tax collections have exhibited a robust growth trajectory in the initial months of fiscal year 2023, setting the stage for continued economic recovery and fiscal consolidation.
