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The Income-tax department on late Friday said that tax collections from corporates soared 34 per cent in first four months of the fiscal over that in the equivalent period in 2021-22, indicating that the “simplified tax regime with low rates and no exemptions” has lived up to its promise, the department said.
In a series of tweets, the department highlighted that the corporate tax collections during April and July period stood at Rs 7.23 lakh crore registered a growth of over 58 per cent as compared to the tax collection of FY 2020-21.
An official estimation suggests that companies with total income above Rs 50 crore, more than 60 per cent have elected for the new corporate tax regime last fiscal year. Companies with income above Rs 50 crore account for 78 per cent of taxable income and corporate tax liability. However, it received lukewarm response from individuals under the new regime.
The centre had slashed corporate tax rate to 22 per cent for existing domestic companies and to 15 per cent for newly incorporated manufacturing companies in September 2019. The intention was to provide impetus to investment and spur demand.
Even when compared to collections of FY 2018-19 (the pre-Covid period), the collections of FY 2021-22 are higher by over 9 per cent, the department said.
“The positive trend of growth continues, even when the corporate tax collections took a temporary hit due to the overall impact of the pandemic during FY20-21.
The first instalment of the advance tax collection (due on June 15) had also seen the robust growth. Advance Tax collections for the first quarter of the financial year 2022-23 were Rs 1,01,017 crore, up from Rs 75,783 crore in the same period of the previous financial year, representing a more than 33 per cent growth, the Central Board of Direct Taxes (CBDT) had said on June 17 while releasing the data of the first instalment.
This included Corporation Tax (CIT) of Rs 78,842 crore and Personal Income Tax (PIT) of Rs 22,175 crore.
The net collections for the fiscal Year 2022-23, (till June 16), were at Rs 3,39,225 crore, up from Rs 2,33,651 crore in the previous year’s same period, showing a 45 per cent rise over the previous year’s collections.
The gross collection of direct taxes for the fiscal year 2022-23 is Rs 3,69,559 crore, up from Rs 2,64,382 crore in the previous year’s same period, reflecting a 40 per cent YoY growth.
The economy had started to recover from the impact of the pandemic last fiscal year but was hit again by a second wave in April-May and a third assault of Covid-19 in December-January.
The centre set a target for direct tax collection for FY23 is Rs 14.20 trillion.
Total tax collection (both direct and indirect taxes) had been projected at Rs 27.58 trillion in BE for FY23. That represents 9.6 per cent growth over the Rs 25.16 trillion pegged in the Revised Estimates (RE) in the previous year. However, collection surpassed the RE to touch Rs 27.1 trillion.
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