The Union government’s net (post-refunds) direct tax collections rose 95% on-year to Rs 3.7 lakh crore till September 2 of the current financial year, thanks to a low base, a pick-up in economic activities, higher corporate earnings and better compliance.

The robust collections are despite a surge in refunds. Net direct tax collections were just Rs 1.9 lakh crore till September 2 of FY21, owing to the Covid-induced lockdowns hat hit economic activities.
In fact, the net direct tax collections till September 2 appears to be substantially higher than the corresponding period of the pre-pandemic year of FY20. Such collections till September 2 this fiscal year were 31% higher than the receipts till August 31 in FY20.

However, for receipts to meet the annual target of Rs 11.08 lakh crore — which requires only a 17% growth — the collections have to remain robust in the remaining period of the fiscal too. Last year, the collections picked up in the second half of the year. The April 1 to September 2 receipts were just 33% of the FY22 target of Rs 11.08 lakh crore.