Q1 Tax Revenue Likely to Exceed budgeted Growth

The government expects its tax revenues in the first quarter to exceed budgeted growth but is likely to stick to the interim budget revenue estimates in the full budget.

Officials said the full-year projection in the interim budget was realistic and arrived at after taking into account multiple factors including global headwinds. “With continuity in tax policy we will stick with the collection target given in the interim budget, which was arrived at after considering margins for both upside and downside trend,” said one of the officials.

For the current financial year (2024- 25), the Centre has pegged its gross revenue collections at ₹38.30 lakh crore, a growth of 11.45% over the re- vised estimates for FY 2023-24.

Typically, the first quarter revenue collections remain muted but the government is confident of growth exceeding 13%. The official said multiple factors including improved compliance, better corporate earnings, enhanced focus on recovery and on-going elections are expected to bolster collections.

The Centre has continued with its spending push despite the elections. The Goods and Services Tax collections for April stood at record ₹2.10 lakh crore and the trend is expected to continue. Tax authorities are focussed on improving collection through enhanced scrutiny and extensive use of data analytics.

The Central Board of Direct Taxes (CBDT) has asked officials to focus on recovery of outstanding demands, giving zone-wise targets. The net tax revenue in April-June 2023 period stood at ₹4.33 lakh crore.

The Centre’s total gross tax receipts in FY24 marginally exceeded the revised estimate (RE) of ₹34.37 lakh crore in the year, another official said. Final numbers will be released on May 31.

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