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.

Payment of Tax under QRMP Scheme, for the month of March 2021

1. All taxpayers having aggregate turnover up to Rs 5 crores, under QRMP Scheme (w.e.f. 01.01.2021 onwards), are required to furnish return on a quarterly basis, along with payment of tax on a monthly basis.

2. Persons availing QRMP Scheme are required to pay the tax due, in each of the three months of the quarter, by depositing the due amount as discussed below.

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3. Payment of Tax for first two months of a quarter (M1 & M2 ie for January and February month for Jan-March Quarter):

  • a. While generating the challan, taxpayers must select “Monthly payment for the quarterly taxpayer” as a reason for generating the challan.
  • b. They can choose either of the following two options to generate the Challan:

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–35% Challan (Fixed Sum Method):
For taxpayers opting for this method, the portal will generate a pre-filled challan in Form GST PMT-06, for an amount equal to 35% of the tax paid in cash, in the preceding quarter, if the return was furnished quarterly or equal to the tax paid in cash in the last month of the immediately preceding quarter if the return was furnished monthly.

–Challan on a self-assessment basis (Self-Assessment Method):

These taxpayers can pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit as available, in FORM GST PMT-06.

RBI announces new initiatives for digital payments, including the ability to use your mobile wallet as a debit card.

Note: The aforesaid options are not available for payment of tax for the third month (M3) of the quarter to persons availing QRMP Scheme.

  • c. Payment of Tax for the third month of a quarter (M3 ie for March month for Jan-March Quarter): For the third month of the quarter (M3), taxpayers can click the button ‘Create Challan’ in Payment Table 6 of Form GSTR-3B and file GST-PMT-06 Challan, for depositing any amount towards their tax liability.

10 Rules that will come into Effect from 1st October 2020

Motor vehicle, Income tax, Health insurance, Credit, and Debit card rules are changing from Oct 1 onward. So, here are the 10 points which you need to know about.

1. Physical verification not required for the documents like Driving License and RC

The tension of keeping a hard copy of documents like RC and driving license together when driving would come to an end. Now you can drive a car with just a clear soft copy of the documentation connected to the vehicle. The Ministry of Road and Highways has informed the numerous such amendments made to the Motor Vehicles Rules of 1989, which will come into force on 1 October. As a step towards easing the ease of the commuter, the central government is expected to digitize documents, including vehicle maintenance, driving licenses, and e-challens, which will now be carried out via the Information Technology Portal from 1 October 2020. Drivers can manage their vehicle documents on the central government’s online site, such as Digi-locker or m-parivahan.

2. Mobile phones only for route navigation

Under the amendments made by the Ministry of Road and Highways to the Motor Vehicles Rules 1989, you will now be able to use mobile navigation on the route in such a way that it does not interfere with the focus of the driver while driving.

3. LPG connection will not be free

Under Pradhan Mantri Ujjwala Yojana (PMUY), the process of obtaining a free gas connection will come to an end on 30 September 2020. The Union Cabinet has approved an extension until the end of September for the usage of free cooking gas cylinders under PMUY.

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4. 5% of tax will be imposed in foreign fund transfer

Any amount sent abroad to get international tour packages, and any other foreign remittances made above 7 lakh, will impose a tax-collected-at source (TCS) starting on 1 October, unless the TDS is already deducted on that amount. While the tax on international tour packages will be 5% for any amount, for other foreign remittances the tax will be charged only for the amount spent above 7 lakh.

5. Sweet sellers will need to display ‘Best Before Date’

Sweet shops will now have to announce the ‘best before date’ of non-packaged or loose sweets available in their shop as well. The Food Safety and Standards Authority of India (FSSAI) has advised sweet shop owners to comply with the procedure as of 1 October.

health insurance
6. Implemention of New Health Insurance

The improvements in health insurance coverage will be implemented aftermath of Covid-19. The costs of premium health care would inevitably increase. The revised health insurance regulations to be enforced post-COVID-19 and inclusion will make 17 permanent illnesses outside the cover.

7. Buying television sets can be expensive

Open-cell panels will face 5% import duty as of 1 October, with the government saying that the duty exemption expiring at the end of this month will not be extended. As a part of ‘Aatmanirbhar Bharat,’ the Government is committed to growing domestic production capacity for open-cell panels so that imports can be curbed. The one-year exemption given to that object expires today, 30 September.

8. New credit and debit card rules by RBI

The Reserve Bank of India ( RBI) has released new guidelines for acquiring debit and credit cards. These reforms will be effective from 1 October 2020. Under the new rules, card users will also be able to register opt-in or opt-out programs, spend limits, etc. for international transactions, online transactions as well as contactless card transactions.

9. FSSAI bans blending of mustard oil with any other cooking oil

The Food Regulator FSSAI restricted the mixing of mustard oil with any other cooking oil with effect from 1 October. In a letter to the Food Safety Commissioner of all States and Union Territories, FSSAI claimed that “the blending of mustard oil with any other edible oil in India has been prohibited with effect from 1 October 2020.”

tcs
10. New Tax Collected at Source (TCS) regime

The Income Tax Department released guidance on the applicability of the TCS law requiring an e-commerce provider to deduct 1% tax on the selling of goods and services. The Tax Collected at Source (TCS) scheme will come into operation from 1 October. The Finance Act 2020 established a new section 194-O of the Income Tax Act 1961, which allows the e-commerce provider, with effect from 1 October 2020, to deduct income tax at a rate of 1 % of the total sum of sales of goods or supplies or both, enabled by means of its digital or electronic facility or website.

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