Third instalment of advance tax down only 17.6% as on Dec 15 against 22% at the start of Nov
“Initial indications, as on December 15, show that total net collection (gross minus refund) of direct taxes reached over ₹4.95 -lakh crore against ₹6.01-lakh crore on the corresponding date of 2019,” a senior government official said while clarifying that since bank- wise reconciliation is on, knowing the exact advance tax collection under the third instalment will take some time.
However, the official was optimistic that the final figures will be much higher than the initial trend.
Any assessee having an estimated TDS (Tax Deducted at Source)/TCS (Tax Collected at Source) for the year of ₹10,000 or more, is required to pay his/her tax in advance. This is required to be paid in four instalments (15 per cent of the total by June 15, 45 per cent by September 15, 75 per cent by December 15 and the entire amount by March 15). According to Budget documents, the government has set a target of gross collection at ₹13.19-lakh crore for the current fiscal year — ₹ 6.81-lakh crore of corporation tax and ₹6.38-lakh crore of personal income tax.
Giving some details about various heads, the official said corporate tax collection as on December 15 was over ₹2.26-lakh crore while it was about ₹2.57-lakh crore through personal income tax. Collection through equalisation levy crossed ₹1,100 crore. Region wise, barring Bengaluru, all regions are in the negative zone with Kanpur seeing maximum de-growth of 32.7 per cent.
Commenting on the tax collection trend, Sandeep Jhunjhunwala, Partner at Nangia Andersen LLP, said with the wheels of the economy back at a normal pace and the increasing hope of fighting the pandemic, the latest direct tax collection data bespeak positivity and faith of the taxpayers as the slowing of the decline. Besides, slow growth in collection of direct taxes was already expected for the year on account of the reduction in corporate tax rates and TDS/TCS rates and various other pro tempore relaxations provided by the Government to cope with the liquidity crisis created by the Covid pandemic.
More time for filing returns
Pushing forward of returns filing due dates has also given taxpayers more time to deposit self-assessment taxes. “Along with the collection of the pending self-assessment tax and fourth quarter taxes, the collection under the Vivad Se Vishwas scheme, which will accrue in the coming quarter, should help push up direct tax collection for 2020-21. New levies in the form of equalisation levy on e-commerce transactions and the domestic e-commerce transaction tax would also add to the kitty,” he said.