Tax collection misses target by a wide margin; inches up 4.7% in Apr-Sep

As against a steep 17.5 per cent higher tax collection budgeted for the full year, the government could mop-up only 4.7 per cent more so far this year, with the direct tax kitty growing to Rs 5.50 trillion as of September 17, up from Rs 5.25 trillion a year-ago.

The lower mop-up reflects the deepening slump in demand and overall growth. In the first quarter the GDP slowed to a six-year low of 5 per cent .

Of the Rs 5.50 trillion collections, advance tax rose a tepid 7.3 per cent to Rs 2.20 trillion from Rs 2.05 crore, according to sources at the taxation department.

It can be noted that the budget had set a direct tax mop-up target of 17.5 per cent for the full year, while the same for indirect taxes are set at 15 per cent .

"Total tax collection till date is Rs 5.5 trillion compared to Rs 5.25 trillion in the same period last year. Net tax collection is around Rs 4.5 trillion as compared to Rs 4.25 trillion as of date," a senior tax official told PTI on Wednesday.

April-September advance tax collection rose to Rs 2.20 trillion from Rs 2.05 trillion , the official said, adding of this advance corporation tax rose only 3.5 per cent while the personal income tax paid in advance rose 7.5 per cent .

The numbers are disturbing for the government as it has already used up as much as 77 per cent of its budgeted fiscal deficit for the full year by July itself. This is 1.4 per cent ages point higher than the comparable period last year.

Fiscal deficit crossed 77 per cent of the annual target in July at Rs 5,47,605 crore, against a target of Rs 7,03,760 crore for the full year.

Total expenditure till July stood at Rs 9,47,278 crore against a fiscal target of Rs 27,86,349 crore. Total receipts for the month stood at Rs 3,99,673 crore against the fiscal target of Rs 20,82,589 crore.

Advance tax is filed by the 15th of the third month of every quarter. Assessees falling under the ambit of advance tax payment are required to pay 15 per cent of the evaluated tax liability in the first quarter, 25 per cent in the second and the rest in equal installments in the remainder of the year.

In FY19, direct tax collection was Rs 50,000 crore short of the Rs 12 trillion target.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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