With a fortnight to go, India's direct tax collections have topped the revised estimates for the current financial year on the back of robust growth across corporation and personal income tax segments. Data released by the CBDT pegged the net collections at over £136 billion, over 9% higher than the revised estimates of £125 billion, and includes refunds of around £19 billion. The numbers showed collections up to March 16, 2022 were 48% higher than the corresponding period last year and 42% higher than the previous year.
On a gross basis (without accounting for refunds), the direct tax kitty is estimated to have expanded over 38% to £155 billion. “The direct tax collections are at record high. These numbers are reflective of robust economic growth and the Indian economy is on track to surpass the pre-pandemic levels,” said Amit Singhania, a partner at law firm Shardul Amarchand Mangaldas & Co.
The higher collections mean that there is less pressure, from the resource point of view, to go ahead with the Life Insurance Corporation of India’s mega public issue as indirect tax mop up is also expected to be healthy. Besides, the Centre is expected to spend lower than what it has budgeted for, especially on the revenue expenditure front. Given the choppy market conditions, the government is all set to defer the LIC IPO until the next fiscal year without upsetting its fiscal calculations.
