Rise in advance tax mop-up signals bullish economy

Mumbai: Advance tax collection for March 15 has been at Rs 9.10 lakh crore, data from income tax department revealed.

So far, Corporates have paid Rs 6.72 lakh crore in advance tax while individuals accounted for Rs 2.37 lakh crore, it said. This Rs 9.10 lakh crore is on a gross FYTD number of Rs 22.25 lakh crore in FY2024 until March 15.

Gross tax collections are up 13.5 per cent yoy while net tax collections are up 14.05 per cent yoy. Very positive numbers, pointing to strong Corporate earnings growth and strong household personal income growth.

Talking to Bizz Buzz, Narayan P Jain, president, All India Federation of Tax Practitioners, says, “TDS, TCS and Advance Tax put together comprises the majority of chunk of the direct tax being collected by the government at the moment. Advance tax is a must for those whose annual direct tax liability exceeds Rs 10,000. Those who fail to do so are liable to pay interest on their tax liability. Hence it is in the interest of taxpayers to pay advance tax in time. Taxpayers are cooperating, which is a good thing for the country.”

Abhishek Aneja, a Delhi-based tax expert says, “Tax collections have witnessed substantial growth over the years, attributed to significant shifts in tax legislation and governmental strategies. This trend serves as a robust indication of the Indian economy's positive trajectory and could potentially bolster confidence in the stock markets.” Additionally, it is anticipated that Advance Tax collections may surge by the end of March, as individuals aim to mitigate additional interest costs through timely

deposits.