Skip to main content

Direct tax collections grow at 6.6% and corporation tax barely 1%

By
Officials said the tax department refunds Rs 750 bn in the first four months of the current financial year, half of what was refunded in the entire FY18.The government might be talking about the surge in filing of Income Tax returns till the August 31 deadline, but direct tax collection data available so far are unlikely to bring a loud cheer. 
The numbers released by the Controller General of Accounts (CGA) on Friday revealed that direct tax collections grew by a meagre 6.6 per cent during April-July of the current financial year against the Budget target of 14.4 per cent for 2018-19. The growth was in comparison with the corresponding period of the last three years.Corporation taxes, in particular, disappointed the exchequer. These collections grew at just 0.57 per cent, the lowest in the first four months in at least seven years. Corporation taxes are budgeted to yield 10.15 per cent more revenues to the coffers at Rs 6,210 billion in FY2019 against Rs 5,637.45 billion in the previous year. 
Personal income tax collections increased by 11.3 per cent in April-July period, also a three-year low in the first four months. Personal income tax is budgeted to grow 19.8 per cent at Rs 5,290 billion in FY19 compared to Rs 4,412.55 billion a year ago. Lower direct tax receipts were one of the main reasons for the government overshooting its revenue deficit target for the entire year by 6.3 per cent in just first four months. direct tax collections Experts said direct tax revenues probably got a dent from refunds. Otherwise, good corporate results in the first quarter would not have yielded so less revenues, they said.
“This (subdued direct tax collections) was probably due to higher refunds,” ICRA principal economist Aditi Nayar said. Officials said the tax department refunds Rs 750 billion in the first four months of the current financial year, half of what was refunded in the entire FY18. Corporate results were quite robust in the first quarter of 2018-19. For instance, aggregate sales of the listed companies grew 12 per cent, which was higher than the year-ago period. Earlier, Finance Minister Arun Jaitley had said that advance tax collections for personal income tax assesses increased by 44.1 per cent and in the corporate tax category by 17.4 per cent in the first quarter of 2018-19.
 
The subdued direct tax figures may puncture the theory of a successful demonetisation, but officials said that the August numbers would be much higher. Income tax returns filed this year mainly reflect tax paid in FY18. The Income Tax department has said the returns filed rose 70.86 per cent at 54.2 million till August 31, the last date of filing returns, against 31.7 million a year ago. The main surge was seen in the category of salaried individuals and those prevailing the presumptive taxation scheme, which gives relief to small businesses who perform tasks such as auditing of accounts and maintaining of account ledgers.

The Business Standard, 3rd September 2018

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more