FY21 collections exceed estimates at тВ╣9.45 lakh cr.; тАШfiscal deficit may be lowerтАЩ
IndiaтАЩs net direct tax collections for the pandemic-hit financial year 2020-21 grew by almost 5% year-on-year to тВ╣9.45 lakh crore, exceeding the revised estimates of тВ╣9.05 lakh crore presented in the Union Budget and reflecting a gradual economic recovery in recent months.
Tax experts said that the Vivad Se Vishwas Scheme to settle pending tax disputes also helped bolster the collections, with net Corporation tax collections for the year at тВ╣4.57 lakh crore.
Revenues from personal income tax, including the Securities Transaction Tax, were тВ╣4.88 lakh crore, as per provisional data released by the Finance Ministry on Friday. Direct tax refunds grew more than 42% in FY21 to тВ╣2.61 lakh crore from тВ╣1.83 lakh crore in the previous year.
тАЬDespite an extremely challenging year, the Advance Tax collections for 2020-21 stand at тВ╣4.95 lakh crore which shows a growth of approximately 6.7% over the preceding financial year,тАЭ the Ministry said.
The improved direct tax collections, along with the recent uptick in inflows of indirect taxes, including the GST, suggest that IndiaтАЩs fiscal position may be better than the 9.5% of fiscal deficit projected in the revised estimates, said Devendra Pant, chief economist, India Ratings and Research.
тАШExpenditure is the keyтАЩ
тАЬThe fiscal deficit in 2020-21 may be lower than the revised estimate, provided there is no slippage on the expenditure side. This is further corroborated by the central government cancelling the last scheduled government borrowing in the previous financial year,тАЭ Mr. Pant said.
тАЬThe strong campaign for the Vivad Se Vishwas Scheme, the use of technology and digitisation, and the widening of tax base coupled with tax collected at source has contributed to higher tax collections,тАЭ said Samir Kanabar, tax partner at EY India.
