The government has achieved over a third of the direct tax collection target for this fiscal year during the April-July period, with personal income tax collection exceeding corporation tax mop-up, according to Livemint report.

The overall direct tax collections, net of refunds, including corporation and personal income tax, surged 40 percent in the first four months of FY23 (April to July) to Rs 5 lakh crore, the report said.

Meanwhile, direct tax refunds increased by 38 percent to Rs 67,000 crore.

On the other hand, tax collected on income of companies surged by 34 percent in the first four months of the current fiscal that began in April, indicating that a simplified tax regime with low rates is yielding results, the Income Tax Department said.

The tax department tweeted on corporate tax collection growth in April-July in an apparent attempt to counter criticism of the 2019 reduction in tax rates for companies which was alleged to have dented the Centre's revenue collections, impacting its spending on social welfare schemes.

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The tax department said corporate tax collections at Rs 7.23 lakh crore in fiscal 2021-22 (April 2021 to March 2022) were 58 percent higher than the mop-up in the previous financial year. "The corporate tax collections during FY 2022-23 (till 31st July, 2022) register a robust growth of 34 percent over the corporate tax collections in the corresponding period of FY 2021-22," it said without giving an absolute number for the collection.

In September 2019, the government had given companies the option to switch to a lower basic rate of 22 percent from 30 percent while foregoing all exemptions. This led to a 16 percent decline in corporate tax collections in 2019-20 to Rs 5.57 lakh crore. But the decline was about Rs 1 lakh crore and not Rs 1.45 lakh crore, as was feared at the time. Tax collections in 2020-21 were hit due to the pandemic.

-With PTI inputs

(Edited by : Anshul)

First Published:Aug 15, 2022 3:33 PM IST