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.

Direct tax proposals highlights- 2021

1. Relief to senior citizen: for 75 years and above: Having only pension and interest income: exemption from filing ITR: Paying banks will do TDS

2. Reassessment: from 6 years to 3 years

Serious tax evasion cases: where evasion evidence is Rs.50lac or more then reopening within 10 years-

3. Dispute resolution committee: it will be faceless:  anyone with total income less than 50 lacs and disputed income less than 10 Lacs can approach this committee

 4. Faceless ITAT: faceless ITAT centre will be set where personal hearings will be conducted through VC

direct tax

 5. Tax Audits: digital transactions from 5 cr to 10 cr

 6. Advance tax liability on dividend will arise only after declaration of dividend

 7. Affordable housing 1.5 lac deduction will now be even available for loan taken till 31.3.2022

 8. 80IBA: extended 31.3.2022

 9. Tax incentive of affordable renting housing project

10. Pre filled income tax return will have pre filled data regarding Dividend, post office interest income, salary etc.

 11. Trusts: educational and hospitals: limit increased from Rs.1 Cr to Rs. 5 crore (10(23C)

12. Late deposit of employee contribution of PF will now be not allowed as deduction.

Recent Post:-

Income Tax Return Filing – New Dates & Deduction Benefits

Highlights of CBDT’s Notification dt. 24th June, 2020.

In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements across sectors due to the outbreak of Coronavirus, on 31 March 2020 the Government has, extended various time limits in order to offer more relief to taxpayers for various compliances –

1. Deadline for filing the original as well as revised income tax returns for FY 2018-19 (AY 2019-20) has been extended to 31 July 2020.

2. The due date for the income tax return for the financial year 2019-20 (AY 2020 – 21) has been extended to 30 November 2020.

Therefore, the returns of income which are required to be filed by 31st July 2020 and 31st October 2020 is extended to November 30th, 2020. Consequently, the date for the furnishing tax audit report has also been extended to October 31st, 2020.

due date income tax return

3. In order to provide relief for small and middle-class taxpayers, the date of payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is up to Rs. 1 lakh has also been extended to 30 November 2020.

However, it is clarified that there will be no extension of the date for the payment of self-assessment tax for taxpayers with a tax liability of more than Rs . 1 lakh. In this case, the full self-assessment tax is payable by the due dates set out in the Income Tax Act , 1961 (IT Act) and the late payment will attract interest pursuant to section 234A of the IT Act.

4. The date for making various investments/payments for claiming deduction under Chapter  VIA-B of the IT Act, which includes Section 80C (LIC, PPF, NSC, etc.), 80D (Mediclaim), 80 G (Donations), etc., has also been extended to 31 July 2020. As a result, the investment/payment may be made up to 31 July 2020 to claim the deduction under these sections for the year 2019-20.

5. The investment/construction/purchase date for claiming rollover benefit/deduction in respect of capital gain under sections 54 to 54 GB of the IT Act was also extended to 30 September 2020. Consequently, the investment/construction/ purchase made up to September 30th, 2020 will be eligible to claim capital gains deduction.

6. The date for the start of operation of the SEZ units for claiming deduction under section 10AA of the IT Act was also extended to September 30th, 2020 for units receiving the necessary approval by March 31st, 2020.

tds due dates

7. The furnishing of TDS / TCS statements and the issuance of TDS / TCS certificates is a requirement for allowing taxpayers to file their income return for FY 2019-20, the filing date for TDS / TCS statements and the issuance of TDS / TCS certificates for FY 2019-20 was extended to 31 July 2020 and 15 August 2020 respectively.

8. The date for passing of order or issuance of notice by the authorities and various compliance with various Direct Taxes & Benami laws needed to be passed / ordered / released by 31 December 2020, were extended to 31 March 2021. The deadline for connecting Aadhaar with PAN will also also be extended to 31 March 2021.

The Minister of Finance has already announced an extension to 31 December 2020 of the date for making payment without additional sum under the “Vivad Se Vishwas” scheme, required legislative amendments for which will be moved in due time. The said Notification has extended to 31 December 2020 the date for the completion or compliance of the actions required to be completed under the Scheme. Consequently, the date of declaration furnishing, order passing, etc. under the Scheme is extended to 31 December 2020.

Deferment of the implementation of the new approval / registration / notification procedure for certain entities u / s 10(23C), 12AA, 35 and 80 G of the IT Act has already been extended from 1 June 2020 to 30 September 2020,

The old procedure i.e. preamended procedure will continue to apply. Necessary legislative amendments in this regard shall be moved in due time.

The Finance Minister has already announced a reduced rate of TDS for specified non-salary payments to residents and a rate of TCS of 25 per cent for the period from 14 May 2020 to 31 March 2021.

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