As per sources within the Finance Ministry, the Centre is likely to maintain its original budgeted estimate of ₹22.07 lakh crore for direct tax collection when it revises estimates in February. Despite a slower-than-expected rise in corporate tax collection, the government anticipates strong personal income tax collection to bridge the gap.
Data till October 10 reveals an 18.3% year-on-year increase in net direct tax collection, reaching ₹11.25 lakh crore. Corporate tax collection saw an 11.26% rise to ₹4.94 lakh crore, still trailing the budgeted growth target of 12% at ₹10.20 lakh crore. In contrast, personal income tax collection surged to ₹5.98 lakh crore, positioning it to potentially exceed its target by ₹1.3 lakh crore, according to insiders.
"The revised estimates for direct tax will largely remain consistent with the budgeted figure," stated an official who requested anonymity, hinting that December’s tax data will offer greater clarity.
The current year’s target for net personal income tax collection is ₹11.87 lakh crore, reflecting a 13.6% increase over the previous fiscal. For FY23, the government’s revised estimate for direct tax collections was ₹19.45 lakh crore, surpassing budget expectations by ₹1.35 lakh crore. Indirect tax targets, however, saw a reduction to ₹14.84 lakh crore from the initial budgeted amount of ₹15.37 lakh crore.
Key Takeaways:
- The Finance Ministry is optimistic that strong growth in personal income tax collection will compensate for weaker corporate tax collections.
- Corporate tax collection up to October 10 is growing slower than expected, but personal income tax may exceed its budgeted target by ₹1.3 lakh crore.
- The final tax collection scenario will be clearer with December quarter figures.
This steady growth in personal income tax collection highlights the resilience of individual taxpayers amidst corporate tax challenges.
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