Key Points
New Delhi:Indias gross tax collection slowed sharply in the second quarter of this financial yeargrowing just 3.8 percentdown from a robust 23.7 percent in the previous quarter, and an even stronger 27.8 percent growth in Q2 of the previous financial year...
The main reason behind this, an analysis of tax data with the Controller General of Accounts (CGA), is the 8.3 percent contraction in corporate tax collection in the second quarter (July to September), which is a dramatic reversal from the 26.2 percent growth in the first quarter (April to June), and a whopping 45.8 percent growth in Q2 of 2023-24...
Apart from corporate tax collection, even personal income tax collection dropped markedly in Q2slowing to 6.7 percent from a 49.9 percent growth in Q1, and 51.2 percent growth in Q2 of last year...
Some of the factors that could be responsible for the lower tax collection include lower corporate earnings for Q2 2024-2025 (announced in October), the relatively muted capital gains from stock market transactions, and the base effect as the tax collection for Q1FY25 were higher, said Shalini Mathur, director, tax and economic policy group, EY India...
D.K. Pant, chief economist at Crisil, said while last years high base was a contributing factor to the chill in tax collection, the overall slowdown in the economy has also played its part.There is no doubt that the overall economic growth slowing as compared to last year would be reflected in the tax collection, he said.. Low spending, budget tricks & ally inflation ..
