A set of good news has been surrounding the Indian economy, and one of them is the jump in gross direct tax collection numbers. During the financial year 2022-23, there has been a whopping 26% increase in the total gross direct tax collection. Let’s understand what it means for our economy.
According to the Central Board of Direct Taxes, the government has collected Rs 13,63,649 crores from gross direct tax collections in the current fiscal year against Rs 10,83,150 crore in the previous fiscal year. This means that India’s gross direct tax collection in the current fiscal year has increased by almost 26%.
The gross collection of 13.63 lakh crores includes a corporate tax of Rs 7.25 lakh crore and personal income tax (PIT) of Rs 6.35 lakh crore. However, an amount of Rs 2.27 lakh crore has been refunded.
Increase in Net Direct Tax Collection
According to government data, till 17th December 2022, the net direct tax collection stood at Rs 11,35,754 crores which was Rs 9,47,959 crores in the previous financial year. This represents an increase of about 20%.
Rise in Advance Tax Collection
The advance tax figures collected till 17th December for the first, second and third quarters of the current financial year stood at Rs 5.21 lakh crore. It was Rs 4.62 lakh crore in the year-ago period. There has been an increase of 12.83% in advance tax collection on an annual basis.
The number of filing tax returns increased rapidly.
According to the Central Board of Direct Taxes, there has been a strong increase in the pace of filing income tax returns during the current financial year. Around 96.5% ITRs have been processed till 17th December. Due to this, the number of refunds has also increased.
Meaning of Increase in Tax Collection
According to the Moneycontrol report, TDS deduction and good corporate advance tax collection performance have contributed significantly to this increase.
The Central Board of Direct Taxes said in a statement that the rise in tax collection shows that the economy has recovered from the pandemic with an increase in earnings of both companies and individuals.
Tax collection is an indicator of the economic activities of any country. An increase in tax collection means an increase in earnings, which is a positive sign for India’s economy.