Gross direct tax mop up dips 4.92% to Rs 12.33 lakh crore in FY20
The gross direct tax collection in 2019-20 fiscal dipped 4.92 per cent to Rs 12.33 lakh crore on account of reduction in corporate tax rate, increased standard deduction and personal I-T exemption limit, the Income Tax department said on Sunday. The Central Board of Direct Taxes (CBDT), in a statement, said the fall in tax collection is on expected line and temporary in nature. The gross direct tax collection in 2018-19 fiscal stood at Rs 12, 97,674 crore.
Key Highlights
- The government had lowered the net direct tax
collection target for 2019-20 fiscal to Rs 11.70 lakh crore in the Revised
Estimates, from Rs 13.3 lakh crore projected in Budget presented in July 2019.
- Although CBDT has not made public the actual net
direct tax collection in 2019-20, adjusting the gross collection (Rs 12.33 lakh
crore) with refunds (Rs 1.84 lakh crore) show net collection of around Rs 10.49
lakh crore during the fiscal. Net collection is gross collection minus income
tax refunds.
- In 2018-19, net direct tax collection stood at Rs
11.36 lakh crore. “It is a fact that the net direct tax collection for FY
2019-20 was less than the net direct tax collection for the FY 2018-19. But
this fall in the collection of direct taxes is on expected lines and is
temporary in nature due to the historic tax reforms undertaken and much higher
refunds issued during the FY 2019-20,” the Central Board of Direct Taxes (CBDT)
said.
- As per data released by the CBDT, the actual gross
corporate tax and Personal Income Tax (PIT) revenue mop up stood at Rs 6.78
lakh crore and Rs 5.55 lakh crore, respectively, in 2019-20, taking the actual
gross direct tax collection to Rs 12,33,720. In FY 2019-20, refunds worth Rs
1.84 lakh crore were given by CBDT, a 14 per cent increase over Rs 1.61 lakh
crore given in FY 2018-19. However, gross collection would have clocked a 8 per
cent growth to Rs 14.01 lakh crore in 2019-20 if revenue foregone in corporate
tax and PIT is taken into account.
- In 2019-20 fiscal, the nominal GDP growth rate was 7.20 per cent. “By removing the effect of the extraordinary and historic tax reform measures and higher issuance of refunds during the FY 2019-20, the buoyancy of total gross direct tax collection comes to 1.12 and almost 1 for corporate tax and 1.32 for Personal Income Tax,” CBDT said.
These buoyancies indicate that the growth trajectories of both the arms of direct taxes, that is corporate tax and PIT are intact and are rising steadily. “Further, the higher growth rate in direct taxes as compared to growth rate in the GDP even in these challenging times proves that recent efforts for the widening of the tax base undertaken by the government are yielding results,” the CBDT said.
SOURCE: Financial Express
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