The government is concerned about the downward spiral of growth in direct tax collection due to the impact of the economic downturn

New delhi date. August 22, 2019, Thursday

The direct impact of the economic downturn in the country is also being seen on the treasury of the government. The direct tax collection growth rate has been below 5% till August 1 in the current financial year. In the current fiscal year, direct tax collection has been targeted at officials with a growth rate of 5.5 per cent which is suspected to be successful.

Consumer durables and non-consumer durables segments are likely to have an impact on the levy given the strong signs of slowdown.

As of August 1, direct tax collections have seen a growth of only 5% after refunds. Refunds increased by eight percent during the period. Compared to the interim budget, the reduction in the direct tax collection target of Rs 5 crore in the final budget of the financial year 1-3 will be challenging to achieve.

The tax rate should be tailored to the economy, said one analyst. There are two main components to direct tax collection. Corporate taxes and personal income taxes. In the personal income tax, the Central Board of Direct Taxes has been given a target of Rs 1.8 trillion, which is 8.5 per cent higher than last fiscal year.

Prior to this, the rate of increase in tax collection was 6% in the last 2-3 years. This year the scheme of notation and income declaration was announced. This year, people deposited their unaccounted money into the bank and regarded it as income, on which they had to pay tax.

"This year's economic downturn is finding it difficult to raise taxes," a tax official said. It was also reported that the tax department is planning to announce incentives to increase tax collection.