Corporate tax collections stood at Rs 14,873 crore, against Rs 5,477 crore a year ago. Individuals paid Rs 2,301 crore, up 22.4 per cent over Rs 1,879 crore in Q1 of 2018-19 (FY19).
The first instalment of advance tax for the current fiscal year ended on June 15. Assessees falling under the ambit of advance tax payment are required to pay 15 per cent of the evaluated tax liability.
The tax authorities believe that such a staggering growth rate is a positive sign for the economy. “These are stupendous figures, which are unusual but encouraging at this point in time,” said an income-tax official.
The economy grew by a 20-quarter low of 5.8 per cent in the fourth quarter of FY19, pulling down the overall growth to a year-low of 6.8 per cent for FY19.
The tax official attributed the spike to a number of factors, apart from the economy correcting itself.
According to him, the department has taken several measures to encourage people to pay advance tax and also monitored the whole exercise of advance tax aggressively. Further, a few big companies
seem to have turned around as some of the sectors’ performance has been improving, compared to the previous financial year.
The interim Budget has set the total direct tax collection target at Rs 13.8 trillion for FY20. According to the new allocation of tax target, Mumbai has been given the highest collection target of Rs 4.39 trillion. So far, Mumbai has collected Rs 27,208 crore, which is 54 per cent higher than the previous year for the same period.
Interestingly, at the close of FY19, the direct tax collection had touched Rs 11.5 trillion, leaving a gap of Rs 50,000 crore, against the target of Rs 12 trillion. Fearing tax slippage this fiscal year, taxmen are learnt to have demanded a cut in the total collection target.To maximise tax collection in Q1 of the fiscal year, the tax department had prepared an action plan which was circulated across the regions on April 1. According to the plan, the tax department has kept an aggressive target for segments such as collection from tax deducted at source and recovery from arrears. Besides, the tax department continued to focus on the self-assessment tax, which is down 10.6 per cent in Q1.
The securities transaction tax did only marginally well, with a growth of 2.3 per cent. The equalisation levy is a matter of concern for this quarter, as it has collected just Rs 13 crore, against Rs 39 crore (down by 67 per cent) for the same period last year