FinMin stares at direct tax revenue shortfall by Rs 70,000 cr to Rs 1 lakh crore

The government may be staring at higher-than-projected deficit for the current fiscal with country`s direct tax revenue expected to fall short by Rs 60,000 to 70,000 crore over the revised target of Rs 12 lakh crore for FY19, officials privy to the numbers said. Direct tax revenue has totalled to Rs 8.4 lakh crore so far this fiscal and it is doubted if the target could be reached in the next three weeks even though collections pick up in the last few months of the fiscal. The Finance Ministry officials said that the direct tax revenue growth is at 12.2 per cent so far as against revised full year aim of 19.8 per cent. 

"We expect Rs 1.5 Lakh crore advance tax payments by companies in fourth quarter. There will also be late income tax filers with penalty before the end of the fiscal," said an official source. However, another source added that the direct tax shortfall is going to be over Rs 1 lakh crore and the government should not have revised the target upwards just buoyed by last fiscal `s precedent. 

Over estimation of revenues is a soft path taken without looking at hard numbers projections, the source said. The Finance Ministry will also receive direct tax revenue from property tax, estate tax, gift tax, capital gains tax. But the prominent will be the income tax and the corporate tax .

The Centre had mopped up Rs 7.88 lakh crore in direct tax during April-January 2019. As per the Budget documents, the government has revised its direct tax collection target to Rs 12 lakh crore in revised estimate from earlier budgeted level of Rs 11.5 lakh crore.

The government had met close to two-third of its revenue collection target from direct taxes, garnering Rs 7.88 lakh crore from April 2018 to January 2019. In FY18, direct tax collection was Rs 10.02 lakh crore, which exceeded the then revised budgeted target of Rs 9.8 lakh crore. The income tax e-returns filed for the April-February period has grown nearly 30 per cent compared with the corresponding period in FY18.

While almost 6.4 crore taxpayers filed returns in the first 11 months of the fiscal, the government is expecting 7.6 crore returns to be filed by the end of FY19 against 6.7 crore in FY18.

In the last three fiscals, March alone had seen 0.8 crore (FY16), 1.1 crore (FY17) and 1.85 (FY18) crore e-return filings. The surge is seen after the Income Tax Department started sending notices to people who are involved in high-value transactions but don`t file returns.