Direct tax collections have shot up 67% to Rs 2.16 lakh crore during the financial year so far on the back of a low base in the previous year due to a national lockdown as well as collections through the dispute resolution scheme. After meeting out refunds which have slowed down over the last few weeks on account of glitches in the income tax portal the mop-up has more than doubled to Rs 1.85 lakh crore between April and June 15, latest data released by the finance ministry on Wednesday showed. Refunds have dropped by almost a third to Rs 30,731 crore during the first 10 weeks of the year. The department expects the number to improve once the tax portal is fully operational. The growth paritcularly the first instalment of advance tax, will provide some much-needed comfort to policy makers and experts who fear that the second wave of the coronavirus pandemic will slow down economic recovery. The government has budgeted for an over 22% increase in direct tax collections during the current financial year. Even on the GST front, the government appeared satisfied with the collections in May, which were estimated at Rs 1,02,709 lakh crore despite lockdowns across several states. On the direct tax front, advance tax collections seen as an advance indicator for economic activity during a quarter are estimated to have jumped almost two-and-a-half times to Rs 28,730 crore. The Central Board of Direct Taxes said the number came "despite extremely challenging initial months of the new fiscal and expected that the data would improve further as more information is received from banks. Every quarter, businesses, professionals and even salaried with income beyond salary need to pay advance tax if their annual liability exceeds Rs 10,000. Within this, corporation tax collections were estimated at Rs 18,358 crore.
