Advance tax collection surges 146% despite Covid-19-led economic disruption

 Net direct tax mop-up zooms 100% till June 15

The advance collection of corporation tax and personal income tax in the first quarter grew 146 percent over last year, while overall net direct taxes doubled during this period compared to 2020, reigniting hopes of sustained economic recovery despite the disruption caused by the second wave of the pandemic.

Collection in the first quarter grew to Rs 28,780 crore against Rs 11,714 crore, the preliminary data released by the Central Board of Direct Taxes showed on Wednesday.

Of the advance tax, corporation tax accounted for Rs 18,358 crore and personal income tax Rs 10,422 crore.

“This amount is expected to increase as further information is received from banks,” the Ministry of Finance said in a statement.

Advance tax is paid as and when the money is earned in four installments rather than at the end of the fiscal year. It is considered an indication of economic sentiment. The first installment or 15 percent of the annual tax is to be paid by June 15, the second by September 15 (30 percent), the third by December 15 (30 percent), and the rest by March 15.

Direct tax collection, net of refunds, grew by 100.4 percent till June 15 to Rs 1.85 trillion compared to Rs 92,000 crore in the same period last year. Corporation tax stood at Rs 74,000 crore, net of refunds, and personal income tax including security transaction tax stood at Rs 1.11 trillion.