With Economy Recovering, Fall In Direct Tax Collections Slows Down Significantly In November

With economic growth gaining strength and recovering at a brisk pace from the COVID-19 induced disruptions and havoc, the contraction in direct tax collection reduced significantly in the bygone month of November, reports Business Standard.

The development was driven by a considerable improvement in personal income tax and corporation tax collections, while the net refunds also declined by only 25 per cent by the end of the month. This was an improvement from the 31.4 per cent decline in November.

The contraction in the collection of personal income tax also shrank to 13 per cent from 22 per cent in September. Personal income tax grew by a stellar 16.6 per cent in October and by 2.6 per cent in September. Meanwhile, contraction in corporation tax eased only slightly to 36 per cent from 40 per cent in September.

This gains significance as the goods and services tax mop up over the past two months have also cropped the Rs one lakh crore mark, indicating demand growth in the markets and the broader economy.

Meanwhile, it should be noted that the net direct tax collection is said to be standing at Rs 4.09 lakh crore as on November 30, down from Rs 5.44 lakh crore in the same period last year.