Demonetisation impact: Direct tax collection up 19% at Rs 1.9 lakh cr

Number of tax returns filed soared to 2.83 crore as against 2.27 crore in the previous year
Direct tax collections jumped 19 per cent in the first four months of the current financial year as demonetisation of higher denomination currency brought in the number of individuals in the tax net.

Collections of direct taxes, which are made up of personal and corporate taxes, soared to Rs 1.90 lakh crore in April-July, an official statement said here.

The collection, net of refunds, was 19.5 per cent of the total Budget Estimate of direct taxes for 2017-18.

Corporate income tax grew 7.2 per cent in gross terms and personal income tax by 17.5 per cent.

"However, after adjusting for refunds, the net growth in corporate income tax collections is 23.2 per cent while that in personal income tax collections is 15.7 per cent," the statement said.

As much as Rs 61,920 crore of tax refunds have been issued during April-July, 5.1 per cent lower than issued in the same period of 2016-17.

Earlier this week, the government released the numbers of tax returns filed, showing demonetisation of old Rs 500 and Rs 1,000 notes had given the substantial growth.

The number of tax returns filed soared to 2.83 crore as against 2.27 crore in the previous year. The growth of 24.7 per cent this year compared with 9.9 per cent in the year-ago period. Individual tax returns filed were up 25.3 per cent at 2.79 crore.

"This clearly shows that a substantial number of new tax payers have been brought into the tax net subsequent to demonetisation," the Central Board of Direct Taxes (CBDT) had said in a statement.

Direct tax collection in 2016-17, at Rs 8,49,818 crore, was 14.5 per cent higher than the previous year - highest growth since 2013-14.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel