The collections of Direct Tax has seen a massive jump of 18.2% in the first nine months (April-December) of the current fiscal year. The government has released the latest results in a press release last week. The print release provided figures which show that the net collections are at a huge 6.56 lakh crores. This amount is higher by a significant 18.2% than the corresponding period last year.
The net Direct Tax collections also represent 67% of the total budget estimates of Direct Taxes for the financial year of 2017-18. The total estimate was Rs 9.8 lakh crores. The figures show the government is positive about meeting the estimate this year.
Gross collections also showed a good increase of 12.6% to 7.68 lakh crores during the April-December period. Net collections are calculated after the refunds have been issued. Refunds worth a total of 1.12 lakh crores have been issued in the said nine months.
The print release also stated that an amount of 3.18 lakh crores has been received as Advance Tax up to the month of December 2017. Positive improvements are seen here too as it reflects a growth of 12.7% over the Advance Tax collections of the corresponding period last year. Advance Tax in both corporate income Tax (CIT) and Personal Income Tax (PIT) has also shown a growth of 10.9% and 21.6% respectively.
Bloomberg Quint had reported that the net direct tax collection rise is in fact highest in last four years. The percentage growth itself has shown a constant year on year growth too, as per the report.
The Narendra Modi government has been pushing for larger inclusion of citizen under the taxpaying net. Big financial moves like the Demonetisation and GST has been helpful for the increase in tax collection and a larger participation of individuals as well as corporates and small businesses in the economic growth.
Though indirect tax collections under the Goods and Services Tax (GST) has shown a slight decline in the last months. The finance ministry has attributed it to several factors such as compliance and tax rate adjustments. GST council has brought down tax rates on as many as 200 goods by about 10% last November.
As the government pushes for more reforms and the economy shows positive growth, the tax collection is expected to rise further.