New Delhi:The actual gross direct tax collection during 2019-20 fiscal dipped by 4.92 per cent to Rs 12.33 lakh crore on account on reduction in corporate tax rate, increased standard deduction and personal I-T exemption limit, the Income Tax Department said on Sunday.
However, the gross collections would have clocked a 8 per cent growth to Rs 14.01 lakh crore in 2019-20 if revenue foregone in corporate tax and Personal Income Tax (PIT) is taken into account.
The gross direct tax collection in 2018-19 fiscal stood at Rs 12,97,674 crore.
"It is a fact that the net direct tax collection for the FY 2019-20 was less than the net direct tax collection for the FY 2018-19. But this fall in the collection of direct taxes is on expected lines and is temporary in nature due to the historic tax reforms undertaken and much higher refunds issued during the FY 2019-20," the Central Board of Direct Taxes (CBDT) said in a statement.
The actual corporate tax and PIT revenue mop up stood at Rs 6.78 lakh crore and Rs 5.55 lakh crore, respectively, in 2019-20, taking the total actual direct tax collection to Rs 12,33,720.
During the fiscal, the revenue foregone due to reduction in corporate tax rate was Rs 1.45 lakh crore, while in PIT (due to increased tax rebate limit and standard deduction) it was Rs 23,200 crore.
If this had not happened, then corporate tax and PIT collection in 2019-20 would have been Rs 8.23 lakh crore and Rs 5.78 lakh crore, respectively.
Thus, the gross direct tax mop up would have been Rs 14.01 lakh crore, which would have been a 8.03 per cent growth over 2018-19, it said.
In 2019-20 fiscal, the nominal GDP growth rate was 7.20 per cent.
"By removing the effect of the extraordinary and historic tax reform measures and higher issuance of refunds during the FY 2019-20, the buoyancy of total gross direct tax collection comes to 1.12 and almost 1 for Corporate Tax and 1.32 for Personal Income Tax. These buoyancies indicate that the growth trajectories of both the arms of direct taxes, i.e., Corporate Tax and PIT are intact and are rising steadily.
"Further, the higher growth rate in direct taxes as compared to growth rate in the GDP even in these challenging times proves that recent efforts for the widening of the tax base undertaken by the government are yielding results," the CBDT said.
In FY 2019-20, refunds worth Rs 1.84 lakh crore were given by CBDT, a 14 per cent increase over Rs 1.61 lakh crore given in FY 2018-19.
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