Government tax collectors have seen impressive growth in direct tax revenues so far in the current financial year primarily driven by a substantial rise in personal income tax payments according to data released recently.
Net direct tax collections between April to mid-July stood at Rs. 5.74 lakh crore marking a strong growth of almost 20% compared to the same period last year. A breakdown of the numbers shows personal income tax is contributing more than 60% of this collection.
The income tax department’s statement states that adjusted for refunds, personal income tax rose over 21% to Rs. 3.46 lakh crore. This includes a massive doubling of securities transaction tax proceeds collected on stock market trades to Rs. 16,634 crore.
In contrast, corporation tax payments saw more modest growth of 12.5% to Rs. 2.10 lakh crore over this duration. Both personal income tax as well as securities transaction tax have outpaced corporate tax collections in the last two fiscal years according to the tax department.
The surge in direct tax collection is heartening news for the exchequer’s coffers and signals resilient economic activity and taxpayer compliance. Personal income including capital gains from stock market activity forming the bulk of this revenue augurs well for individual spending power and private consumption in the coming quarters.
