In a major shot in the arm for the Narendra Modi government, the country’s gross direct tax collections during the current fiscal year up to 10th January, 2023 have shot up by a robust 24.6% over the same period of the previous year to touch the Rs. 14.71 lakh crore mark.
The higher direct tax collections, which comprise corporate and personal income tax, reflect that the economy is growing at a robust pace and also means that the government can continue with its social welfare schemes for the poor without the fiscal deficit spinning out of control.
This will give Finance Minister Nirmala Sitharaman more elbow-room in preparing the Union Budget for 2023-24 which is expected to give a big push to infrastructure projects to create jobs and spur growth.
“Direct Tax collection, net of refunds, stands at Rs. 12.31 lakh crore which is 19.55 % higher than the net collections for the corresponding period of last year. This collection is 86.68% of the total Budget Estimates of Direct Taxes for financial year 2022-23,” the official statement issued by the finance ministry today said.
So far as the growth rate for Corporate Income Tax (CIT) and Personal Income Tax (PIT) in terms of gross revenue collections is concerned, the growth rate for CIT is 19.72% while that for PIT is 30.46%. After adjustment of refunds, the net growth in CIT collections is 18.33% and that in PIT collections is 21.64%, the statement explained.
Refunds amounting to Rs. 2.40 lakh crore have been issued during 1st April, 2022 to 10th January 2023, which are 58.74% higher than refunds issued during the same period in the preceding year.
The higher direct tax collections also come in the backdrop of buoyant monthly GST (goods and services tax) collections which have exceeded Rs 1.4 lakh crore for 10 months in a row. The higher tax earnings on goods and services are a clear indicator of the expansion in the country’s economic activity during this period.