News

I-T refunds of Rs 1.7 lakh cr to hurt FY20 direct tax mop-up

 I-T refunds of Rs 1.7 lakh cr to hurt FY20 direct tax mop-up

The government handed out refunds to the tune of Rs 1.7 lakh crore, pulling down its direct tax collections in FY20.

Net direct tax collections so far this financial year were Rs 7.3 lakh crore against Rs 7.7 lakh crore in the corresponding period in FY19, finance ministry officials said. This implies a shortfall of about Rs 40,000 crore or over 5%.

Net direct tax collections are gross direct tax collections minus income tax refunds. Direct taxes include personal and corporate income tax and levies such as securities transaction tax and banking cash transaction tax.

The shortfall is on account of the corporate tax cut and higher tax refunds, the officials said.

While the corporate tax cut is estimated to cost the government Rs 1.45 lakh crore, income tax refunds have hit Rs 1.7 lakh crore so far this year against Rs 1.39 lakh crore in the fiscal-ago period.

Refunds have increased largely due to ease of online return filing and pre-filled form facility along with Aadhaar one-time-password authentication. Combined with a 10% increase in personal tax collections, this makes for a notable increase in refunds.

Top