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Corporate heavyweights give govt a breather

By Shrimi Choudhary & Dilasha Seth
June 18, 2020 16:30 IST
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Tax department feels that the second quarter would be much better than the first quarter of the year as the economy has started improving.

Economy

Illustration: Dominic Xavier/Rediff.com

The first quarter advance tax collection from India Inc has been revised upward to Rs 39,880 crore from initial mop up of Rs 8,572 crore as payments by some heavyweight companies have come late due to COVID-19 limitations, said CBDT sources.

In some cases, banks are still updating the final figures.

 

According to the latest numbers, the corporation advance tax payments showed a dip of 40 per cent as on June 17 over Rs 65,558 cr in the same period a year ago.

Personal income advance tax payments declined almost 48 per cent at Rs 6,775 crore from Rs 13,025 crore over the same period.

As such, the rate of fall in the advance tax collections shown till June 15 declined.

Interestingly, the initial collections reported on Tuesday showed a decline of 76 per cent from the collection from corporate.

With this, the gross direct tax collection came to Rs 1,73,970 crore, down 24.4 per cent as on June 17 this financial year against Rs 2,30,245 crore of the same period in the previous year.

Factoring in refunds of Rs 48,903 crore against the Rs 62,813 crore in this period, net direct collections fell by 25.3 per cent to Rs 1,25,065 crore from Rs 1,67,432 crore over the period under review.

Mumbai received as much as Rs 17,202 crore of advance tax payments, post the banking hours, taking up the total from Rs 3,757 crore to Rs 20959 crore.

Despite that, there was a decline of 33.2 per cent in Mumbai’s collections year-on-year.

Delhi on the other hand saw Rs 4,200 crore worth of last minute filing, taking up the final collection number to Rs 5,904 crore.

Still, it remains 45 per cent lower compared to last year’s collection.

Chennai, reported a 37 per cent decline in collections at Rs 1,346 crore compared to last year.

Kolkata posted a 51 per cent decline in advance tax collections in the first quarter this year at Rs 1,795 crore, while Ahmedabad saw a 50 per cent decline at Rs 2,017 crore compared to last year.

Hyderabad and Pune reported a 36 per cent and 46 per centdecline respectively.

Meanwhile, the collection from the Securities Transaction Tax (STT) and other taxes has shown a double digit growth, with STT up 13.6 per cent, thanks to the volatile markets.

Even these revised figures continue to challenge the revenue department as the government set a tall target of collecting Rs 13.12 trillion from direct taxes for FY'21.

But the numbers are still better considering the situation of companies who are making very limited profits.

Tax department feels that the second quarter would be much better than the first quarter of the year as the economy has started improving.

“The figures up to the June 15 evening showed a trend that the collections are going to be much lower than what we saw last year.

"However, last minute filings did help bump collections a bit, which is a plus. The collections outlook for the fiscal remains negative as of now,” said a government official.

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Shrimi Choudhary & Dilasha Seth in New Delhi
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