Direct tax mop up for the first time is likely to decline in around two decade's time. This shall be alongside a scenario when the country's economic growth has fallen sharply lower to six-year's low and cut in corporation taxes.
For the year 2019-20, the government targeted to raise direct tax mop up by over 17% in comparison to last year to as much as Rs. 123.5 lakh crore. But until January 23, the centre has managed to amass only Rs. 7.3 lakh crore from direct tax collection.
Nonetheless, a sharp fall in demand has impacted business and forced them to cut on investment as well as jobs, leading to fall in direct tax collection.
The tax amount collected so far is barely 5.5% higher than that was collected until the same period last year. In accordance with the data for the last 3 years, on collecting taxes from companies in advance for the first three quarters, government manages to garner 30-35% of the annual direct tax revenue in the last 3 month.
Senior tax officials however claim that despite best of efforts, the centre in direct tax collection will be able to less than Rs. 11.5 lakh crore earned in the fiscal year 2018-19.