Despite 74% more direct tax collections, the government borrows 58% of its target.

Despite 74% more direct tax collections, the government borrows 58% of its target.

Despite the fact that the Centre has collected 74% higher direct taxes on an annualised basis this fiscal year, at Rs 5.70 lakh crore, it has also borrowed a staggering 58 per cent of the budgeted amount by selling Rs 7.02 lakh crore worth of debt instruments in the market during the same period.

While it mopped up Rs 31,000 crore in long-term and short-term debt at an average price of 6.15 per cent at the weekly auction of government securities earlier in the day on Friday, the revenue department said later in the day that net personal income tax and corporate tax collection jumped a full 74% to Rs 5.70 lakh crore so far this fiscal, driven primarily by advance tax and TDS payments.

The Central Board of Direct Taxes stated in a statement that the mop-up of net direct tax (after deducting refunds from gross collection) between April 1 and September 22 was Rs 5,70,568 crore, up 74.4 per cent from Rs 3.27 lakh crore collected in the same time last year.

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Furthermore, the net collection is 27% higher than the Rs 4.48 lakh crore it received in FY20, which was prior to the pandemic.

Furthermore, it has been collecting record amounts of indirect taxes in the form of GST (which has been exceeding Rs 1 lakh crore almost every month) and record duties on petroleum products, totaling Rs 94,181 crore in the first quarter on the back of a record tax on fuel that generated an 88 percent increase in revenue over the previous financial year.

According to Care Ratings, the government borrowed Rs 31,000 crore in today’s weekly auction by selling 5, 13, 14, and 30-year securities.

With this, the overall market borrowings so far this fiscal are Rs 7.02 lakh crore, down 8% from previous fiscal’s total of Rs 7.66 lakh crore at this time, and Rs 12,652 crore less than the auctions’ total disclosed amount.

To put it another way, the debt raised so far in FY22 accounts for 58% of the overall projected borrowing limit of Rs 12.05 lakh crore for the fiscal year, and 52% if the GST compensation to states of Rs 1.58 lakh crore is added to the borrowing limit for the year, according to the study.

According to the agency’s chief economist Madan Sabnavis, the weighted average yield across tenures fell 4 basis points to 6.15 per cent last week and is now 31 basis points lower than the peak reached in early August when it soared to 6.46 per cent on August 6.

The Finance Ministry will begin the budgetary process on October 12th.

It should be noted that the government has been collecting Rs 32.90 in excise duty on every litre of petrol (which has been selling for over Rs 100 a litre for months) and Rs 31.80 on a litre of diesel since April last year and had collected a whopping Rs 3.35 lakh crore in FY21 when the total excise mop-up was only Rs 3.89 lakh crore, up from Rs 1.78 lakh crore in FY20. Excise duty on fuel and gasoline was Rs 2.13 lakh crore in FY19.

The CBDT reported that gross direct tax collection so far this fiscal year has surpassed Rs 6.45 lakh crore, up 47 per cent from Rs 4.39 lakh crore in the same period last year and 16.75 per cent more than Rs 5.53 lakh crore in FY20.

Advance tax and tax deducted at source account for Rs 2.53 lakh crore of the entire mop-up. The mop-up was 74% higher than previous year’s levels, with self-assessment tax worth Rs 41,739 crore, regular assessment tax worth Rs 25,558 crore, dividend distribution tax worth Rs 4,406 crore, and tax under other minor areas around Rs 1,383 crore.

This fiscal’s advance tax collection is Rs 2,53,353 crore, up 56% from Rs 1,62,037 crore a year before. Corporation tax of Rs 1.96 lakh crore and personal income tax of Rs 56,389 crore have been collected in advance.

Social Media Rumours on changing ITR forms rules are rejected by CBDT

  • 29 Jul 2019
  • ITR
  • Comments Off on Social Media Rumours on changing ITR forms rules are rejected by CBDT

The Central Board of Direct Taxes (CBDT) on Tuesday disproved reports in social media about changes being executed in ITR form2 and 3. The income tax division expressed that only the utility software has been refreshed which won’t hamper the filing of returns. Meantime, there were reports in social media that the tax payers were confronting difficulties in efiling of income tax return in ITR-2 and ITR3 for the financial year 2018-19 because of wide-scale alterations in the ITR form for the AY 2019-20

“No progressions have been made in any of the Income-tax return(ITR) forms including ITR-2 and ITR-3 since the warning made on April 1 2019, which is on the first day of the Assessment Year 2019-20,” CBDT said.

The income tax expert has explained that the software utility for e-filing of all the ITR forms has been published long back on second May and on tenth May 2019 separately. However, the software utility update is a dynamic procedure and is persistently taken up according to the input received from the clients/filers to ease their experience in electronic filing of returns.

Other than this, it has additionally explained that the updating of utility does not hamper filing of return as the taxpayers are permitted to file ITR utilizing the utility which is accessible by that time. Despite the fact that the utility is being updated routinely to give ease to taxpayers, the returns filed by utilizing the past version of utility will continue being substantial. It is relevant to express that the updation in the utility of ITR forms depends on feedback and basically went for facilitating the compliance burden of the tax payers by encouraging simpler e-filing. For example, this year, the advantage of pre-filling of return forms has been given dependent on the information given in the TDS statement.

This facility has been refreshed in the utility therefore. This would generously diminish the efforts of taxpayers in filling of return forms. It is emphasized that there are no changes in the mentioned ITR forms; just the utility has been updated to encourage the taxpayers. Hence, the affirmation that various changes have been made in ITR-2 and ITR-3 on July 11, 2019, does not give a correct picture.

For  more details or in case any queries, contact Certicom Consulting.