Setback before Budget, Direct Tax Collection in Worst Condition of 20-Years

For the first time in 20 years, the direct tax collection is expected to drop. This claim has been made in a report by news agency Reuters. According to the report, till January 23, the tax department has raised only Rs 7.3 lakh crore. If compared to the same period in the last financial year, the tax collection is 5.5% less.

Let us tell you about the government's target, the direct tax collection was estimated at around Rs 13.5 lakh crore in the current financial year. That is to say that the target of tax collection in the current financial year (1 April 2019 – 31 March 2020) is about 6.2 lakh crores is far away. Let us tell you that the direct tax collection is about 80 percent of the government's annual revenue. Obviously, the government may have to take a loan in the event of a decrease in revenue.

Report
In fact, news agency Reuters has prepared a report based on interactions with eight senior tax officials. In the report, these officials have said that despite all efforts, the direct tax collection in the current financial year may be less than Rs 11.5 lakh crore. Officials said, "Forget the target of tax collection, this will be the first time that we will have Will see a decline. Let us tell you that tax collection in the financial year 2018-19 was Rs 11.5 lakh crore.

Reason
Last year, the government had cut corporate tax to remove economic slowdown. But officials say that this is one of the major reasons for the decrease in tax collection. Due to this deduction of the government, revenue of Rs 1.45 lakh crore is certain to be incurred.

Setbacks before budget
This report has come at a time when the general budget is going to be presented on 1 February. Before the budget, there is constant bad news on the economic front. Several major rating agencies, including IMF, World Bank, have lowered GDP growth estimates. At the same time inflation has also increased. In such a situation, now it is important to see what action is taken by the government in the general budget.