Advance tax revenues, driven primarily by businesses, showed curtailed growth in the fourth quarter of this fiscal year, with the overall collection rising just 0.88%, according to tax department data released Monday.
Corporate advance tax payments increased modestly by 2% year-on-year. However, net direct tax collection surged by 13% to reach Rs 21.3 crore, reaching the full-year target of Rs 22.37 crore on March 31st.
This slowdown in corporate advance tax payments is in contrast to the strong overall performance seen in the first three quarters of the fiscal year. Tax officials told NDTV’s interests.
Cumulative advance tax collection, including both corporate and non-working taxes, has increased by 14.6% until it reached Rs 10.45 crore as of March 16th.
However, compared to the previous quarter, companies’ advance tax collection growth has been significantly slower. Until mid-March, advance tax collection for businesses increased by 12.5%, with a significant slowdown from the observed 16.71% growth by mid-December.
In the fourth quarter, growth in advance tax collection from businesses remained relatively low at 2.03%. Experts say this slow growth could provide a cautious outlook among corporate taxpayers and reflect a wider economic situation.
Nevertheless, the overall total tax collection has shown strong performance, reaching the total amount of 25.9 Rs. 2016, 2016.2% year-on-year.
On a net basis, the collection grew 13% after adjusting for refunds, a total of Rs 21.3 crore compared to the same period last year. This includes a net company collection of Rs 9.69 lakh and a non-working collection of Rs 11.01 lakh.
Digital analytics has helped the department increase personal income tax compliance, indicating double-digit growth in the collection, officials said on condition of anonymity.
Despite slow fourth quarter growth, the tax sector is still on track to reach its targets and could exceed estimates, experts said.
For now, the outlook remains positive, and they added that tax collection continues to show healthy growth despite the challenges facing the corporate sector in the second half of the fiscal year.
