Surge in Direct Tax Collections
- It also comprises personal income tax receipts, which include the Security Transaction tax of Rs. 1.11 lakh crore and Corporation tax receipts of Rs. 74,356 crores.
- Strong exports and the continuing numerous industrial and building operations are two factors that contributed to the increase in direct tax collection.
- The first quarter of 2021–2022 is predicted to have double-digit GDP (Gross Domestic Product) growth.
Direct Tax
A direct tax is one whose burden cannot be transferred to another party and is directly borne by the person upon whom it is levied. It is taken out of a taxpayer’s income at the source. For instance: Because the individual whose income is subject to tax is required to pay the tax directly to the government and face the financial burden of the tax, income tax is a direct tax. Other instances of direct tax include:-
Corporation Tax
- The net income or profit that businesses produce from their operations is subject to a direct tax known as corporation tax.
- Corporation tax is due by all Indian companies, public and private, that are established under the Companies Act of 1956.
- By the rules of the Income Tax Act of 1961, this tax is assessed at a certain rate.
- India lowered its corporation tax rates in September 2019 for both new and existing businesses, from 25% to 15% and 22%, respectively, from 30%.
- The effective tax rate for already operating businesses is now 25.17%, down from 35% when a surcharge and cess are included.
Security Transaction Tax
- It is a direct tax imposed on the acquisition and disposal of shares listed on India’s official stock exchanges.
- Both the buyer and the seller must contribute 0.1% of the share’s value as STT.
Dividend Distribution Tax
- Dividends are payments made from a company’s profits to its shareholders.
- As a result, one kind of tax, known as the split distribution tax, is due on the dividends the firm offers its shareholders.
- The DDT was removed from the tax paid by the dividend payer in the Union Budget for 2020–2021. Instead, dividends would be taxed in the hands of shareholders of the distributing firm starting in April 2021.
- The suggested rate is 20% for dividends given to overseas investors and 10% for stockholders who are Indian citizens.
Surge in Direct Tax Collections and Tax Elasticity
According to data from the Direct Tax Collections for the Financial Year 2022–23 as of mid–June, net collections increased by 45% from the prior year. Corporation tax has the highest percentage of the total amount of Net Direct Tax collected, followed by Personal Income Tax (PIT), which includes Security Transaction Tax (STT), and other taxes.
Corporation Tax receipts of 74,356 crores and Personal Income Tax receipts, which comprise the Security Transaction Tax of 1.11 lakh crore, make up the direct receipts from April 1 to June 15. Over the same time the previous year, revenues totaled 92,762 crores.
Contact Us