India's Covid economy resilient - Diret tax surges in FY22

The story: In an unexpected sign of economic resilience despite the devastating Covid-19 second wave, the advance tax collections have risen almost on

 India's Covid economy resilient - Diret tax surges in FY22

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• The story: In an unexpected sign of economic resilience despite the devastating Covid-19 second wave, the advance tax collections have risen almost one-and-half times in the first quarter of 2021-22 compared to fiscal 2020-21. That has pushed up the net direct tax collections in the first two-and-half months of the new fiscal.

• Details: The 2021-22 opened on a very challenging note, with several lakh gasping for breath and dying due to Covid-19's almost unchecked spread. But the income tax collection seems unaffected!

1. (a) Advance tax collection for Q1 stood at Rs.28,780 crore against Rs.11,714 crore in the corresponding previous period, a growth of 146 per cent (as per the Central Board of Direct Taxes (CBDT)
2. (b) June 15 was the due date for the first instalment of advance tax. Out of total collection, corporate tax had a share of Rs.18,358 crore while personal income tax contributed Rs.10,422 crore. The CBDT said that number could go up as reconciliation with banks was pending.

• Advance tax: As per Section 208 of the Income Tax Act, every assessee, barring those above the age of 60 not running any business, having estimated TDS (Tax Deducted at Source)/TCS (Tax Collected at Source) for the year of Rs.10,000 or more, is required to pay advance tax in four instalments (15 per cent of the total by June 15; 45 per cent by September 15; 75 per cent by December 15, and the entire amount by March 15).
• Net collection soars: Overall, gross direct tax collections for FY22 exceeded Rs.2.16-lakh crore against Rs.1.38-lakh crore in the corresponding previous period. With refunds of over Rs.30,000 crore, the net collection totalled Rs.1.86-lakh crore, showing a growth of more than 100 per cent over the Rs.93,000 crore mopped up in the same two-and-half of the last fiscal. Corporate tax collection topped Rs.74,000 crore while personal income tax contributed over Rs.1.11-lakh crore.
• Why the rise: The primary reason for this appears to be the success of the "Vivad se Vishwas" scheme. Taxpayers have taken advantage of the scheme and settled their disputes/ litigations with the Income-Tax Department besides depositing their tax dues.
• Summary: This sudden burst of revenue will be a sigh of relief for the government, struggling with pushing the economy back into recovery mode.

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