With strong growth in personal income tax (PIT), net direct tax collection surged about 22 per cent to over ₹6.93 lakh crore during April 1 and August 11 of the current fiscal, data released by the Central Board of Direct Taxes (CBDT) released. However, growth in Corporation Income Tax was subdued.

Net collection figure arrived after deducting refunds from gross collection. During the period under consideration, gross collection rose to over ₹8.13 lakh crore from ₹6.55 lakh crore. Refunds also grew from to over ₹1.20 lakh crore from ₹90,000 crore showing a growth of over 33 per cent.

One of the key numbers out of overall collection was related to Securities Transaction Tax (STT) which more than doubled during the period to around ₹21,500 crore. This tax is levied on transaction of equities and mutual fund. Since the market has been witnessing strong rally with large volume, there is impact on collection and it is expected to rise further.

Though the Board has not given any reason for strong rise in PIT, it is believed that with rise in income of individuals coupled with better compliance resulted in strong growth. Also, use of technology helped the department to keep an eye on potential evaders and that also helped the collection to grow. However, just 6 per cent growth in the Corporation Income Tax might be a worrying factor.

For the current fiscal, corporation tax is estimated at ₹10.20 lakh crore indicating a growth of 10.5 per cent over Revised Estimates of FY 2023-24. Similarly, Personal income tax is estimated at ₹11.87 lakh crore in BE 2024-25 which is higher by 16.1 per cent over RE 2023-24. Department is hopeful that with various reform measures, the collection would be much better. Some important reform measures, initiated under direct taxes include widening of scope of TDS and TCS by including new transactions such as foreign remittance, purchase of luxury cars, e-commerce participants. A new provision has been introduced in the Income Tax Act requiring the successor entity to file a modified return within 6 months of the order of reorganisation being passed by the competent authority.

An Integrated e-Filing and Centralised Processing Center 2.0 (CPC 2.0) project was launched with a view to providing better e-filing experience, ease of compliance, more accurate and faster processing of ITRs. During the current year, over 7.28 crore ITRs have been filed till July 31, compared to 6.77 crore for the same period last year. This marks an impressive growth of 7.5 per cent. Notably, almost 72 per cent of the taxpayers filed their ITRs under the New Tax Regime.

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