Gross collection at Rs 6.45 trillion is 47 per cent higher than last year. (Illustration: Ajay Mohanty) Advance tax
collection during the second quarter of the fiscal year grew over 50 per cent over the equivalent period in 2020-21, providing the government with additional spending power to fuel economic recovery after the disruption caused by the second Covid-19 wave earlier this year.
The advance tax
mop-up in the second quarter between July 1 and September 22 stood at Rs 1.72 trillion, a growth rate of 52.2 per cent over the Rs 1.13 trillion in the same period last year, the preliminary data released on Friday by the Central Board of Direct Taxes showed.
in the April-September period stood at Rs 2.53 trillion, a 56 per cent growth rate over the Rs 1.62 trillion in the corresponding period last year.
Of the advance tax in the first half of the fiscal year, corporation tax
accounted for Rs 1.96 trillion and personal income tax Rs 56,389 crore.
“This amount is expected to increase as further information is awaited from banks,” the Ministry of Finance said in a statement.
Collection in the current fiscal year so far is 14.62 per cent higher than the 2019-20 levels of Rs 2.21 trillion.
Advance tax is paid as and when the money is earned in four instalments rather at the end of the fiscal year. It is considered an indication of economic sentiment. The first instalment, or 15 per cent of advance tax, is to be paid by June 15, the second by September 15 (30 per cent), the third by December 15 (30 per cent), and the rest by March 15.
Direct tax collection
net of refunds grew by 74.4 per cent up to September 22 to Rs 5.7 trillion compared to Rs 3.27 trillion in the same period last year. Corporation tax
stood at Rs 3.02 trillion, net of refunds, and personal income tax including security transaction tax stood at Rs 2.67 trillion.
Gross collection at Rs 6.45 trillion is 47 per cent higher than last year. This includes corporation tax
of Rs 3.58 trillion and personal income tax, including securities transaction tax, of Rs 2.86 trillion.
Aditi Nayar, chief economist, ICRA Ratings, said the robust growth was an enthusing signal of the waning impact of the pandemic on Indian macros.
“The sharp jump in direct tax collection
has benefited from the formalisation of the Indian economy, which was already underway, but has been accelerated by the pandemic. The formal/tax-paying portion of the non-agricultural economy has gained market share at the cost of the balance, benefiting from the structural shifts generated by demonetisation, goods and services tax, as well as the Covid shock,” she said.
This suggests the upturn will sustain in the second half as well, even though a normalising base may dampen the pace of growth, she added.
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