Driven by a hefty increase in tax refunds which more than doubled in the first quarter of the current fiscal, net direct tax collections dropped by almost 17% during the same period to Rs 57,268 crore. The net direct direct tax collections stood at Rs 68,675 crore in the same period last fiscal.
Tax refunds recorded a 205.01 per cent increase at Rs 46,868 crore in the April-June quarter of 2011-12 as against Rs 15,366 crore in the year-ago period, pulling down net direct tax collections.
However, gross direct tax collections during the same period (April – June 2011) were up by 23.91% at Rs 1,04,136 crore as against Rs 84,041 crore a year ago.
Besides, belying fears of an economic slowdown, gross collection of corporate taxes was up 23.49% at Rs 68,223 crore against Rs 55,244 crore last year, whereas gross collection of personal income tax was up by 24.63% at Rs 35,859 crore against Rs 28,772 crore last year.
The net figure of tax shouldn’t be a cause for worry, as long as there is increase in the gross receipts. Once the pending refunds are cleared, there would be less outgo due to interest on delayed refunds, and future refund figure would also decline. Hence in future, the deductions from gross tax receipts would be reduced.