The government may slash its tax revenue forecast for FY20 by Rs 1-1.5 lakh crore, Business Standard reported.
This will be one of the largest cuts seen in recent times, and the second time the estimate has been revised since the interim Budget was presented in February 2019.
This lower estimate indicates a shortfall of 4.1-6.1 percent over the current projection of Rs 24.61 lakh crore. The previous tax revenue projection was Rs 25.5 lakh crore, a 22 percent surge from the previous year.
Moneycontrol could not independently verify the story.
Direct tax collection for the current fiscal, excluding refunds, dropped 5.17 percent till the previous week of January 2020, caused by a Rs 1.41 lakh crore refund, the article quotes a source as saying.
The government has so far collected only Rs 7.32 lakh crore through direct taxes in FY20, struggling to meet a target of Rs 13.35 lakh crore, the report said.
By this time in FY19, direct tax collection stood at Rs 7.71 lakh crore.
The government already estimates a Rs 1.45 lakh crore hit from the cut in corporate tax rate.
Both, officials and experts think that the tax revenue target, including the projection for direct tax collection, will be missed in 2019-20.
“Ideally the tax target for the fiscal should be cut by Rs 1-1.5 lakh crore in the Budget,” Madan Sabnavis, Chief Economist at CARE Ratings told the publication.