Why Tax Collection is up?
- The government attributed it to more stringent technology-based enforcement and compliance, including implementing the Annual Information Statement (IAS) last year.
- An overview of all financial transactions made throughout a financial year, including interest, dividends, transactions involving securities, mutual fund transactions, and international remittances, is provided to a taxpayer by AIS.
- Because of this, the amount of self-assessment tax, which is a type of personal income tax, increased by 255% to Rs. 43,500 crores from January to July.
- Recent Q1 results season revealed that owing to pent-up demand, most corporations produced larger profits, which resulted in higher advance taxes.
- After the pandemic, the services sector has also seen tremendous development and job growth, which may help to explain the pattern of tax growth.
- For transactions totaling more than Rs. 10,000, the government instituted a 1% TDS on virtual digital assets as of July 1 of this year.
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.
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