New Delhi, September 23 (FN Bureau) In what suggests strong economic recovery despite second wave of pandemic, net direct tax collections which comprise primarily income tax and corporate tax surged 74.4 per cent to Rs 5.70 lakh crore in financial year 2021-22 (as on September 22, 2021) as compared to Rs 3.27 lakh crore in the corresponding period of previous financial year. As per data released by Central Board of Direct Taxes (CBDT), the net direct tax collection of Rs 5.70 lakh crore comprises corporation tax of Rs 3.02 lakh crore and personal income tax including security transaction tax (STT) of Rs 2.67 lakh crore. The revenue buoyancy provides more room to the government for making additional spending. Some of the economists have said that direct tax mop-up for the full year would surpass the government’s budget estimate.
“The gross collection of direct taxes (before adjusting for refunds) for the FY 2021-22 stands at Rs 6,45,679 crore compared to Rs 4,39,242 crore in the corresponding period of the preceding financial year, registering a growth of 47 per cent over collections of FY 2020-21,” the CBDT said. The apex direct tax authority noted that despite extremely challenging initial months of the current fiscal, the advance tax collection in the second quarter (1st July, 2021 to 22nd September, 2021) of FY 2021-22 stood at Rs 1.72 lakh crore showing a growth of 51.50 per cent over the corresponding period in FY 2020-21 when the advance tax collection was Rs 1.13 lakh crore. “It (jump in tax collection) gives the government room to spend if required. The high tax collections show economic activities are holding up. Economic activities are improving from the lows and that is what is showing in tax collection. Definitely from the last year and the dip that happened in the second wave has been recovered,” said an economist with a Mumbai-based bank.
The cumulative advance tax collections for the first and second quarter of the FY 2021-22 stood at Rs 2.53 lakh crore as on September 22, 2021 against advance tax collections of Rs 1.62 lakh crore for the corresponding period of the immediately preceding financial year exhibiting a growth of 56 per cent. Further, the cumulative advance tax collection of Rs 2.53 lakh crore as on September 22, 2021 (FY 2021-22) shows a growth of 14.62 per cent over the corresponding period in FY 2019-20 when the advance tax collection (cumulative) was Rs 2.21 lakh crore. “Refunds amounting to Rs 75,111 crore have also been issued in the FY 2021-22 so far,” the CBDT said in a statement.