NET DIRECT TAX

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Context

• India’s net direct tax collections have risen 17.63% in 2022-23 to touch ₹16.61 lakh crore, as per provisional data released by the Finance Ministry.

Read about Direct Taxes: https://www.iasgyan.in/daily-current-affairs/direct-taxes-11

Sector-wise contribution

Corporate Tax Collections

• The contribution of corporate tax collections in the gross direct tax kitty was ₹10.04 lakh crore.
• Corporate tax accounted for just 51.1% in the year gone by as opposed to 52.6% in 2021-22

Personal Income Tax and Securities Transaction Tax

• ₹9.61 lakh crore has been paid by taxpayers as personal Income Tax and Securities Transaction Tax (STT).
• At a gross level, the share of personal income tax and STT to the tax kitty has touched 48.9% in 2022-23 compared to around 47.4% in 2021-22.

Gross Tax collections

• Gross tax collections grew 20.33% to ₹19.68 lakh crore in 2022-23, compared to ₹16.36 lakh crore in the previous financial year.

Tax refunds

• Tax refunds jumped at a sharper 37.4% year-on-year to a little over ₹3.07 lakh crore from ₹2,23,658 crore in 2021-22.

Higher growth in Tax Collections

• Gross corporate and personal tax collections along with STT, have put 2021-22 collections from these taxes at ₹16.32 lakh crore and the 2022-23 kitty at about ₹19.65 lakh crore, signaling a higher 20.38% growth.
• The Budget Estimates [BE] for direct tax revenue in the Union Budget for FY 2022-23 were fixed at ₹14.20 lakh crore which were revised and the Revised Estimates [RE] were fixed at ₹16.50 lakh crore. The provisional direct tax collections [net of the refunds] have exceeded the BE by 16.97% and RE by 0.69%.
• Net direct tax collections had grown a little over 49% to ₹14.12 lakh crore in 2021-22. As of March 10, 2023, the net direct tax kitty had grown around 16.8% to ₹13.73 lakh crore over the corresponding period of last year.
• The provisional growth rate of 17.6% is good and high and surprising to most analysts.

Closing Remark

• The momentum is certainly welcome as it should lead to greater confidence in the outlook for the new financial year.

PRACTICE QUESTION Q. Direct taxes are based on the ability of a person to pay so it promotes equality among payers and citizens. Do you agree? What are the trends of Direct Tax Collection in India? Elaborate.

https://www.thehindu.com/business/Economy/net-direct-tax-collections-up-1763-exceed-revised-estimates-target/article66696101.ece