Supported by better compliance, lower reimbursements and a gradual revival of economic activities, the center collected Rs 13.63 trillion in direct taxes by 16 March 2021-22, Rs 1.13 trillion or 9% more than the revised estimate (RE ) for the year. With the robust skim, the government could rake in a slightly larger sum than it could have raised from Life Insurance Corporation’s IPO, which has now been delayed until next fiscal year.
The higher than expected tax revenues in FY22 also make the corresponding budget estimate (BE) for FY23 a gross underestimate. In two weeks, direct tax revenue without refunds in the current fiscal year could be around Rs 14 trillion, within striking distance of FY23 BE of Rs 14.2 trillion.
With expected incremental net revenue of Rs 20,000 crore as Goods and Services Tax (GST) revenue and a tidy sum in incremental tariff revenue given the rise in import value, the total net tax revenue in FY22 could be higher than the corresponding ua of Rs 17.6 trillion through a tidy Rs 1 trillion.
The budget for FY23 projects nominal GDP growth of 11.1% for the year. Independent estimates suggest that growth could be slightly higher due to higher inflation, although real GDP growth could be less than 8-8.5% as projected by the economic survey. That means the lift needed to meet the net tax revenue (BE) target will be well below the budgeted 0.9.
“The record direct tax collection performance in FY22 is due to reforms over time, greater compliance and taxpayers’ awareness of paying taxes on time. We also expect tax collections to be robust over the next fiscal year and to exceed target,” Central Board of Direct Taxes Chair JB Mohapatra told FE.
Prepayments of direct taxes by corporations, LLPs and individuals rose over 30% yoy to about Rs 1.8 trillion in Q4FY22 even as a favorable base effect faded. Cumulative tax prepayments through the March quarter of FY22 totaled Rs.6.62 trillion (as of March 16), up about 41% from FY21 and 51% from FY20, an official said.
As of 16 March of the current fiscal year, direct tax revenues (after refunds) amounted to Rs 13.63 trillion, an increase of about 48% yoy, an increase of 43% over the same period in FY20 and 35% compared to the corresponding period in FY19.
Gross Direct Tax Revenue (before refunds) was Rs 15.5 trillion as of March 16, growing 38% yoy and 37% yoy in FY20.
Gross receipts to 16 March included corporate taxes of Rs. 8.37 trillion (up 37% yoy) and income taxes including Securities Transaction Tax (STT) of Rs. 7.1 trillion (up 40%). Among the smaller bounties, tax deducted at source as of March 16 was Rs 6.86 trillion (38%); Self Assessment Tax of Rs 1.34 trillion (35%); Regular assessment tax of Rs 55,249 crore (47%); STT at Rs 23,190 crore (37%) and Countervailing Levy at Rs 3,444 crore (94%).
In the current fiscal year, Rs 1.87 trillion in refunds have been issued so far.
https://www.financialexpress.com/economy/fy23-tax-revenue-target-looks-easy-direct-tax-receipts-exceed-revised-estimate-by-rs-1-1-trillion/2464422/ The tax revenue target for FY23 looks simple with direct tax revenue topping revised estimate by Rs 1.1 trillion