Personal income tax receipts rose an impressive 22% in the advance tax collections up to December, which experts attributed to the widening of the tax base after demonetisation.
Advance tax receipts up to December grew 12.6% to Rs.3.2 lakh. The growth in corporate income tax was 10.9%, while personal income tax grew 21.6%.
“Higher personal advance-tax collection of 21.6% reflects expansion of tax base and impact of demonetization. This, probably allays fears of slowdown in taxpayer base. Also, higher share of income-tax (67%) is significantly higher as compared to an average share of around 53% over last four years. While this should be compared with growth /collection of GST, to evaluate this as an aberration due to stringent measures to clamp down on black money,” said Samir Kanabar, tax partner at consulting firm EY.
Net direct tax receipts totalled Rs.6.56 lakh crore up to December, 18.2% higher than the receipts for the corresponding period last year. The net direct tax collections represent 67% of the total budget estimates of direct taxes for the 2017-18 financial year, which has been set at Rs.9.8 lakh crore.
Gross collections (before adjusting for refunds) have increased by 12.6% to Rs.7.7 lakh crore during April to December. Refunds amounting to Rs.1.1 lakh crore have been issued during this period.
The government had launched a massive drive against tax evasion after demonetisation and has attributed the sharp increase in the number of returns filed, to the move to unearth undeclared income. Traditionally, tax collections surge in the last quarter.
Tax experts said the increase in personal income tax is impressive but the momentum needs to be maintained to meet the annual target.