Tax collection for the financial year 2016-17 rose to Rs 17.10 lakh crore, exceeding the revised estimates of Rs 16.97 lakh crore for the year. The provisional figures also show that the tax revenues have gone up by 18 percent compared to 2015-16, notwithstanding fears of an economic slowdown induced by Prime Minister Narendra Modi's decision to demonetise Rs 500 and Rs 1,000 notes.
Net direct tax collection comprising personal income tax and corporate tax rose 14.2 percent YoY to Rs 8.47 lakh crore while indirect taxes comprising service tax, excise duty and customs increased 22 percent to Rs 8.63 lakh crore, according to an update released by the finance ministry on Tuesday.
Direct taxes, amnesty scheme for tax evaders
The spike in direct tax collection could also be because of declarations by tax evaders under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), 2016. The deadline ended on March 31 this year. While there are no official estimates, it was presumed to be in the range of Rs 7,000 to Rs 10,000 crore. The PMGKY entails a tax burden, besides parking of a part of the said amount in an interest-free bank account.
"Tax @30% of the undisclosed income, surcharge @33% of tax and penalty @10% of such income is payable besides mandatory deposit of 25% of the undisclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years," the government had said while announcing the amnesty scheme last December.
Corporate income tax on a net basis (after refunds) grew 6.7 percent while personal income tax spurted 21 percent.
"Refunds amounting to Rs.1.62 lakh crore have been issued during April 2016-March 2017, which is 32.6% higher than the refunds issued during FY 2015-16," the update said.
In another update related to refunds, the income tax department had said on February 13 this year that around 4.19 crore income tax returns had been processed up to February 10 and 1.62 crore refunds issued.
"The amount of refunds issued at Rs.1.42 Lakh Crore is 41.5% higher than the corresponding period last year. As a result of emphasis on expeditious issue of refunds, 92% of all Income Tax returns were processed within 60 days demonstrating CBDT's commitment to faster and more efficient taxpayer service. Of the refunds issued, 92% are below Rs.50,000 due to the high priority given to expeditious issue of refunds to small taxpayers," the department said.
Indirect taxes
Net excise duty collection stood at Rs 3.83 lakh crore (up 33.9 percent), service tax mop-up was Rs 2.54 lakh crore (up 20.2 percent) and customs netted Rs 2.26 lakh crore, up 7.4 percent.
Both direct and indirect tax collection figures indicate that they surpassed their individual revised targets.
The year 2016-17 is the last financial year before the roll-out of Goods and Service Tax (GST) with effect from July this year.
The impact of the tax revenues would be felt only on Wednesday as the stock and currency markets are closed on Tuesday for Ram Navami.
The government, or for that matter, the RBI, is yet to come out with details of demonetised notes deposited till March 31, 2017. As already known, the deadline ended on March 31 for all resident Indians though NRIs have time till June 30, 2017.
Here is the tax collection update as of February 28, 2017:
