Advance tax collection growth slows to 3.9%, income tax mop-up lower than FY25 level

The advance tax collections for personal income at Rs 33,928.32 crore are lower than the first installment collections of Rs 34,863.78 crore seen in the previous financial year 2024-25 (as on June 19, 2024).

The slower growth in advance tax collections for personal income tax seems to be more pronounced, a possible indication of the impact of the income tax cuts undertaken in the Budget as well as slowing income growth.

Non-corporate tax includes taxes paid by individuals, Hindu Undivided Families (HUFs), firms, Association of Persons (AoPs), Body of Individuals (Bols), local authorities, artificial juridical persons. Every person, whose estimated tax liability for the financial year is Rs 10,000 or more, is required to pay his or her taxes in advance in the form of “advance tax”. The advance tax has to be paid in four installments during the year.

The first installment has to be paid on or before June 15 with payment of not less than 15 per cent of the advance tax. The second installment has to be paid on or before September 15 with 45 per cent advance tax as reduced by the amount paid in the earlier installment. The third installment requires 75 per cent to be paid on or before December 15, followed by 100 per cent payment on or before March 15.

Overall, growth in net direct tax collections so far until June 19 also slipped into negative territory, declining 1.39 per cent to Rs 4.59 lakh crore from Rs 4.65 lakh crore in the corresponding period of the previous financial year. The net collections were lower as refunds increased by 58 per cent to Rs 86,385 crore until June 19 this year. Gross direct tax collections, however, rose 4.86 per cent to Rs 5.45 lakh crore this fiscal.

Net corporate tax collections slowed to Rs 1.73 lakh crore, down 5.13 per cent from the year-ago period. Personal income tax or non-corporate tax collections increased marginally by 0.7 per cent to Rs 2.73 lakh crore. Securities Transaction Tax (STT) increased by 12 per cent to Rs 13,013 crore during the period.