Rama Krishna Sangem
Ahead of her seventh union budget presentation to the parliament on July 23, Finance Minister Nirmala Sitharaman is cash rich. She got a 20 per cent jump in the direct taxes advance payments to a tune of around Rs 5.74 lakh crore. This is in addition to Rs 2.11 lakh crore came from the RBI in the form of dividend, double the amount expected.
Net direct tax collection grew 19.54 per cent to over Rs 5.74 trillion so far this fiscal on higher advance tax payment by corporates. The first instalment of advance tax, which was due on June 15, rose 27.34 per cent to Rs 1.48 trillion. This includes Corporation Income Tax (CIT) at Rs 1.14 trillion and Personal Income Tax (PIT) at Rs 34,470 crore.
The net direct tax collection of Rs 5,74,357 crore (as of July 11, 2024) includes CIT at Rs 2,10,274 crore and PIT at Rs 3,46,036 crore, as per data released by Central Board of Direct Taxes (CBDT) on Saturday. Securities Transaction Tax (STT) contributed Rs 16,634 crore to the direct tax collection, it said.
Last year it was Rs 4.80 lakh cr
During the same period last year, net direct tax collection was Rs 4,80,458 crore. Refunds amounting to Rs 70,902 crore have also been issued in FY25 till July 11, which is 64.4 per cent higher than refunds issued during the same period in the previous year.
For April-July 11, gross collection of direct taxes (before adjusting for refunds) stood at Rs 6.45 trillion compared to Rs 5.23 lakh crore in the year-ago period, showing a growth of 23.24 per cent. For full fiscal year, the interim budget has pegged direct tax collection at Rs 21.99 trillion.
This buoyancy in the tax collections tell us two things: First, the economy is strong enough to sustain the growth momentum. Second, the FM will have enough money in the hand to spend more on Capex, like infrastructure projects and other initiatives to boost domestic consumption.
It would be easier for the government to concede demands from BJP allies JD(U) and TDP for special status for Bihar and Andhra Pradesh or more funds for their development. The government cannot use funds paucity as an excuse to deny these demands.
