India’s net direct tax collection amounted to Rs. 14,09,640.83 crore for the fiscal year 2022, which was the highest collection ever, signaling that the Indian economy bounced back after the two years of the pandemic.
Central Board of Direct Taxes (CBDT) Chairman J.B. Mohapatra said that “as against Rs. 14.09 lakh crore this year, our collection in 2020-21 was only Rs. 9.45 lakh crore. In a single year, we moved upwards by nearly Rs. 4.5 lakh crore, registering a growth of 49%”. He added, “the collection is the best ever as far as income tax and corporation tax are concerned”.
Gross direct tax collections (before adjusting for refunds) grew 32.8% to Rs. 16,34,454.95 crore in FY22 compared with Rs. 12,31,270.52 crore in FY21.
Mr. Mohapatra said, “increase in net and gross collection numbers is a major indication of the strengthening of the Indian economy. This gives the clearest signal that the Indian economy has bounced back after two pandemic years. The direct tax collection this year has surpassed the indirect tax collection which was the other way around till last year. It is now 52%, our aim is to look at 60% of the tax contribution coming from direct taxes in some years”.
Addressing the conference, the chairman said, “more than 7.14 crore I-T returns were filed for 2021-22 on the e-filing portal, compared to 6.9 crores filed for 2020-21. Refunds amounting to Rs. 2.24 lakh crore have been issued in 2021-22 fiscal till May 31, 2021. Optimal utilization of technology resulted in a reduction of time taken to process the verified ITRs as the average processing time for the assessment year 2021-22 came down to 26 days.
Currently, the direct tax-to-GDP ratio stands close to 12%. The Central Board of Direct taxes has given a signal toward increasing the tax-to-GDP ratio to 15-20% in 5-10 years along the line of the World Bank which says that tax revenues above 15% of a country’s gross domestic product (GDP) are a key ingredient for economic growth and, ultimately, poverty reduction.
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