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Tax collections increased by 9% to ₹10.82 lakh crore, with advance tax collections from companies jumping by 6.11%
Tax Collection: ₹26,306 crore has been collected as Securities Transaction Tax (STT) so far in the current financial year. STT collections stood at ₹26,154 crore in the same period a year ago.
Net direct tax collections have increased by 9.18% year-on-year to ₹10.82 lakh crore in the current financial year, compared to ₹9.91 lakh crore in the same period a year ago. Net direct tax collections have risen due to increased advance tax collections from companies and a decline in refunds. Refunds issued to taxpayers during this period decreased by 24% to ₹1.61 lakh crore.
According to data released by the Income Tax Department on Thursday, gross direct tax collections between April 1 and September 17 increased by 3.39% year-on-year to ₹12.43 lakh crore. During this period, advance tax collections from corporates grew by 6.11 percent to ₹3.52 lakh crore. However, advance tax collections from non-corporate groups fell by 7.30 percent to ₹96,784 crore. Net corporate tax collections rose to ₹4.72 lakh crore from ₹4.50 lakh crore in the same period last year.
The data shows ₹26,306 crore has been collected as Securities Transaction Tax (STT) so far in the current financial year. STT collections in the same period last year were ₹26,154 crore. The government has set a target of ₹25.20 lakh crore in direct taxes this fiscal year, representing a 12.7 percent increase year-on-year. A target of ₹78,000 crore has been allocated for securities transactions during this period.
Meanwhile, due to withdrawals of advance tax, bank cash reserves have fallen to a four-month low. Consequently, banks are now compelled to engage in the foreign exchange market to raise funds, which has also increased the cost of daily financing. Companies pay advance taxes on the 15th of the last month of each quarter.
According to Reserve Bank of India (RBI) data, liquidity in the banking system declined below ₹700 billion on Wednesday. This drove the overnight call rate to 5.65%, its highest in four weeks. To raise funds in rupees, banks resorted to overnight selling and buying of dollar/rupee positions. This caused an increase in interest rates in the foreign exchange swap market. Foreign exchange swap rates have been trending upward over the past two days, reflecting the current and anticipated tightening of rupee liquidity.
