India’s net direct tax collections for 2022-23 increased by 17.63% to Rs 16.61 lakh crore, surpassing the revised estimate of Rs 16.5 lakh crore, with corporate tax collections at Rs 10,04,118 crore, up 16.91% YoY, and provisional gross personal income tax collection at Rs 9,60,764 crore, up 24.23% from last year.
Net direct tax collections in India rose by 17.63% to Rs 16.61 lakh crore in 2022-23, exceeding Revised Estimates of Rs 16.5 lakh crore, as per the finance ministry. The provisional gross collection of direct taxes stood at Rs 19.68 lakh crore, a 20.33% increase over FY 2021-22. In the fiscal year 2022-23, refunds exceeding Rs 3.07 lakh crore were issued. The Income Tax Act and Portal have seen substantial revamping in the last few years, which has helped in tracking transactions and collecting taxes. Gross corporate tax collection stood at Rs 10,04,118 crore, rising by 16.91% year-on-year, while the gross personal income tax collection stood at Rs 9,60,764 crore, an increase of 24.23% from the previous year.
Direct tax collections in India surpass revised estimates
India’s net direct tax collections for FY 2022-23 have exceeded the Revised Estimates of Rs 16.5 lakh crore by rising 17.63% to reach Rs 16.61 lakh crore, as per the finance ministry. The provisional gross collection of direct taxes was Rs 19.68 lakh crore, a 20.33% increase over the previous year.In the fiscal year 2022-23, refunds exceeding Rs 3.07 lakh crore were issued. The Income Tax Act and Portal have seen substantial revamping in the last few years, which has helped in tracking transactions and collecting taxes. The gross corporate tax collection stood at Rs 10,04,118 crore, a 16.91% YoY increase, while the gross personal income tax collection stood at Rs 9,60,764 crore, an increase of 24.23% from the previous year.
Budget Estimates and revised estimates for direct tax revenue
The Budget Estimates (BE) for direct tax revenue were fixed at Rs 14.20 lakh crore for 2022-23, which was later increased to Rs 16.50 lakh crore in the Revised Estimates. The net direct tax collections exceeded the BE by 16.97% and RE by 0.69%, according to the ministry. The government refunded nearly Rs 3.1 lakh crore in FY23. Finance Minister Nirmala Sitharaman revised the annual projection based on strong collections up to January, aiming to achieve the fiscal deficit target of 6.4% of GDP despite increased spending. While spending is typically lower than the revised estimates, several ministries are unable to use the entire money allocated to them, and the finance ministry is tightening the release of funds while keeping an eye on the deficit numbers.
Higher tax refunds in FY23
The gross direct tax collections for FY23 before adjusting for tax refunds stood at Rs 19.68 lakh crore, a 20.33% growth rate YoY. The growth rate for tax collection, after adjusting for tax refunds, was lower in FY23 than the growth rate in gross tax collection, suggesting a higher amount of tax refunds were paid compared to the previous year. Refunds worth over Rs 3.07 lakh crore were issued in 2022-23, showing an increase of 37.42% over the previous year. The double-digit growth in tax collection is on expected lines, and the government is hopeful of meeting the fiscal deficit target of 6.4% of GDP.
