Net direct tax collections to grow by 17.63% in FY23

Net direct tax collections for the financial year 2022-23 rose by 17.63% to INR 16.61 trillion, surpassing the revised estimates (RE) of INR 16.5 trillion, according to a report from the finance ministry. 

The provisional gross collection of direct taxes before refunds for 2022-23 was INR 19.68 trillion, a 20.33% increase over the previous year’s gross collection of INR 16.36 trillion.

Recent direct tax data shows a significant increase, with net collections for FY23 reaching INR 16.16 trillion as of April 1. The provisional figures for the year indicate that net direct tax collections are at INR 16.61 trillion, compared to INR 14.12 trillion in the previous year. The budget estimates (BE) for direct tax revenue were set at INR 14.20 trillion for 2022-23, with RE raised to INR 16.50 trillion.

The finance ministry notes that net direct tax collections have exceeded the Budget Estimates by 16.97% and the Revised Estimates by 0.69%, including refunds worth over INR 3.07 trillion issued in 2022-23. Corporate tax collections for the period stood at INR 10.04 trillion, a 16.91% increase year-on-year, while provisional gross personal income tax collection (including Securities Transaction Tax) in 2022-23 stood at INR 9.60 trillion, an increase of 24.23% from the previous year.

Experts attribute the increase in direct tax collections to the revamping of the Income Tax Act and Portal in recent years, including tools like Annual Information Statement/Tax Information Statement (AIS/TIS) that automatically reconcile taxpayer data and the expansion of  Tax Deducted at Source/Tax Collected at Source (TDS/TCS) provisions, allowing for better tracking of transactions.

Source: Indian Express