Direct tax collection for FY23 rises over 17%, exceeds revised estimates by 0.7%

The provisional estimate of the government's direct tax collections for 2022-23 is just under 1% higher than the revised estimate.

Provisional data released by the finance ministry indicated that the government collected Rs 16.61 lakh crore in direct taxes for the fiscal year 2022-23.

This amount represents a 17.6 percent increase over the previous year's collection. It has also surpassed the revised estimate of Rs 16.5 lakh crore provided in the Union Budget for 2023-24 marginally by 0.7 percent.

"Refunds of Rs 3,07,352 crore (Rs 3.07 lakh crore) have been issued in the FY 2022-23 showing an increase of 37.42 percent over the refunds of Rs 2,23,658 crore (Rs 2.24 lakh crore) issued in FY 2021-22," the finance ministry said in a statement.

As such, in gross terms without adjusting for refunds, the direct tax collections in 2022-23 amount to Rs 19.68 lakh crore, up 20.3 percent from 2021-22.

In terms of the break-up of the collections, the provisional data shows gross corporate tax collections in 2022-23 stood at Rs 10.04 lakh crore, up 16.9 percent from 2021-22. Meanwhile, personal gross income tax collections posted an increase of 24.2 percent from 2021-22 to stand at Rs 9.61 lakh crore, the finance ministry said.

The higher-than-expected direct tax collections for 2022-23 mean the government now expects a 9.8 percent growth in these collections in 2023-24, as opposed to the 10.5 percent forecast in the Budget that was presented on February 1 in line with the nominal GDP growth the finance ministry had assumed.

As per the Budget, the government expects to collect Rs 18.24 lakh crore as direct taxes in 2023-24, with Rs 9.23 lakh crore from corporate taxes and Rs 9.01 lakh crore from personal income taxes.

As the numbers released by the finance ministry today are only provisional in nature, they could rise further.