The Indian government’s tax collections jumped in the first quarter of the financial year that began in April thanks to new levies and a rule change requiring taxpayers to pay some tax in advance earlier than before.
Direct tax collections climbed almost 25% to Rs 1.24 lakh crore during the April-June period, mainly on account of early advance tax mop-up, the government said in a statement. The collection up to June is 14.63% of the annual budget target.
Personal income tax collection surged nearly 30% while corporate taxes grew 13.5%.
The main reason for the increase is change in requirements for advance tax payment made in last year’s budget.
From this financial year, individuals must pay four installments of advance tax at the rate of 15%, 30%, 30% and 25% in June, September, December and March. Earlier, individuals needed to pay advance tax in three installments in September, December and March.
After accounting for refunds, net growth in personal income tax is 48.75% and corporate tax is 4.43%. Refunds for personal income tax during April-June 2015-16 were much higher than in the corresponding period of the ongoing financial year, the government said.
Separately, the government said that collections from indirect taxes such as services tax and customs duty increased almost 31% to Rs 1.99 lakh crore in the April-June quarter from a year earlier.
However, the growth rate was 10.2% if tax collection from additional resource mobilisation measures is excluded.
The government had, in the budget for 2016-17, announced measures such as a new Krishi Kalyan cess on all services, an infrastructure cess on vehicles and a clean energy cess to mop-up additional funds to spend on agriculture, rural economy and for environmental measures.
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