Net direct tax collection
surpasses RE in FY24; corp tax receipts a miss
Direct tax
collection, net of refunds, moderately exceeded the revised estimates (RE) for
the financial year 2023-24 (FY24) on the back of personal income tax revenues,
but corporation tax receipts fell short of the RE.
Net direct
tax collection stood at Rs 19.58 trillion in FY24, surpassing the RE of Rs
19.45 trillion by Rs 13,000 crore, or 0.7 per cent.
The
government had revised up FY24 projections for personal income tax by 13.5 per
cent over the Budget estimates (BE) of Rs 9 trillion, at Rs 10.22 trillion. The
actual collection (including securities transaction tax), however, exceeded the
RE by 2.1 per cent at Rs 10.44 trillion.
On the
other hand, the RE for corporation tax was kept at the same level as the BE, at
Rs 9.23 trillion for the year. Even then, the mopup fell short of the estimates
by Rs 12,000 crore, or 1.3 per cent, at Rs 9.11 trillion.
As such,
while actual growth in personal income tax collection was higher at 25.3 per
cent in FY24, as against 22.7 per cent pegged in the RE over the FY23 mopup,
that of corporation tax was lower at 10.3 per cent, as against 11.7 per cent in
the RE.
The Central
Board of Direct Taxes (CBDT) did not respond to a query as to why corporation
tax collection, net of refunds, was slightly lower than the RE.
CBDT
Chairman Nitin Gupta had told Business Standard in October that the rate of
growth in corporate collection would not pick up, attributing the slowdown to
the concessional corporate tax regime (introduced in FY20). He said it would
continue to grow at a moderate rate.
The
government had cut the corporation tax rate to 22 per cent (25.17 per cent with
cess and surcharge) from 30 per cent with effect from FY20 if companies do not
avail of any exemptions and incentives. The tax rate was cut to 15 per cent for
any new domestic company incorporated on or after October 1, 2019, which makes
fresh investment in manufacturing till March 31, 2023. This was later extended
till March 31, 2024.
The total
direct tax collection grew 17.7 per cent year-on-year compared to 16.9 per cent
pegged in the RE.
Sumit
Singhania, partner at Deloitte India, hoped that this would allow the new
administration after elections to hit the policy reforms road running, keeping
the goal of improving taxpayers services at the core of the tax reforms agenda.
If one adds
refunds to the total collection, the resultant gross direct tax collection grew
18.5 per cent to Rs 23.37 trillion during FY24 from Rs 19.72 trillion during
FY23.
Refunds of
Rs 3.79 trillion were issued during 2023-24, showing an increase of 22.7 per
cent over Rs 3.09 trillion issued the previous year
Gross
personal income tax collection rose 24.3 per cent to Rs 12.01 trillion during
FY24 over Rs 9.67 trillion a year ago. Gross corporation tax mop-up was up
13.06 per cent to Rs 11.32 trillion during 2023-24 over Rs 10 trillion during
FY23.
Since
indirect tax collection also exceeded the RE for FY24, the total tax revenue
would be higher than the RE.
Central
Board of Indirect Taxes and Customs Chairman Sanjay Kumar Agarwal recently said
the indirect tax collection for FY24 had exceeded the RE of Rs 14.84 trillion
by "a handsome margin", helped by a record GST mop-up.
www.business-standard.com.
dt. 22.04.2024