Personal income tax saw contraction shrink to 13 per cent by November from 22 per cent seen up to September, on the back of lower issuance of refunds and improvement in economic conditions
Contraction in direct tax collection narrowed significantly in November on the back of considerable improvement in personal income tax and corporation tax mop up, pointing at further improvement in economic activity and jobs availability in the third quarter of the fiscal year.
Direct tax collections, net
of refunds, declined by 25 per cent by end of November, an improvement from the
31.4 per cent decline in September. Improved collections will come as a respite
for the Centre as it faces spending pressure to spur economic activity.
Personal income
tax saw contraction shrink to 13 per cent by November from 22 per cent seen
up to September, on the back of lower issuance of refunds and improvement in
economic conditions. Decline in corporation tax collection eased slightly to 36
per cent by November, from 40 per cent by September. The impact of base effect
on account of corporation tax reduction in September last year will be largely
visible in December when the third installment of advance tax collections come
in by the middle of the month.
Net direct tax collection
stood at Rs 4.09 trillion as on November 30, down from Rs 5.44 trillion in the
same period last year, according to provisional numbers shared by a government
official. The mop up is merely 31 per cent of the target of Rs 13.19 trillion
estimated in the Budget for 2020-21. The refunds are 8 per cent lower at Rs
1.38 trillion compared Rs 1.5 trillion in the same period last year.
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