NEW DELHI, Sept 25:
The trend of increase in income tax collection is expected to continue in the coming months on increased compliance, higher corporate profitability and increased trade in festive season, experts said.
The gross direct tax collection grew 30 per cent to Rs 8.36 lakh crore in the April to mid-September period of the current fiscal on increased corporate tax and personal income tax (PIT) mop up due to increased economic activity.
Deloitte India Partner Rohinton Sidhwa said the reason for rising tax collection, aside from the increase in economic activity, is attributable to the marked increase in compliance demonstrated by the number of returns filed.
“The increase in compliance also stems from influencing behaviour like the sharing of details of income generating activity that taxpayers are being shown on the e-filing portal.
“It’s expected that the trend will continue for now. While corporate tax returns are still to be filed for the last fiscal, advance tax collections show strong trends indicative of earnings,” he said.
EY India Tax & Regulatory Services Partner Sudhir Kapadia said India Inc has seen a robust increase in profitable growth, aided to some extent by an increase in consumer prices due to higher inflation.
Robust increase in PIT shows that earnings of individuals have been on the rise, as also those of proprietary and partnership businesses.
“The overall growth in India’s economy along with the increasing digitisation of tax administration has ensured that an increasingly greater share of the economy is coming under the tax net,” Kapadia pointed out.
The Rs 8.36 lakh crore direct tax collection for the April 1- September 17 period includes corporate tax of Rs 4.36 lakh crore and PIT of Rs 3.98 lakh crore. After deducting refunds of Rs 1.35 lakh crore issued, there was a 23 per cent growth in net direct tax mop up, totalling Rs 7 lakh crore.
Experts said increased demand from consumers has also manifested itself in higher Goods and Services Tax (GST) mop up, with over Rs 1.40 lakh crore being the ‘new normal’ for collections every month.
“Considering the upcoming festive season, it is expected that the tax collection will continue to ride a spree. However, there will be a looming risk of domestic as well as global price increase,” Shardul Amarchand Mangladas & Co Partner Amit Singhania said.
AMRG & Associates Senior Partner Rajat Mohan said the introduction of crypto tax has aided in increasing the number of taxpayers and broadening the tax base, leading to a spurt in tax collections. (PTI)
NEW DELHI, Sept 25: