“The hardest thing to understand in this world is the income tax.”
— Albert Einstein
Gujarat has business-friendly policies and understands the value of taxes. The state seldom ever disappoints with tax collections. Where direct tax collection in Gujarat is concerned, the graph continues to move upwards. According to a report, the state has reported a net collection of Rs 83,772 crore at the end of 2022-23, which is Rs 13,000 crore (18.38%) more than the collection from 2021-22.
That said, this year’s collection falls short of the Central Board of Direct Taxes (CBDT) expectation, which had announced a target of Rs 84,800 crore, later revised to Rs 82,600 crore, which the state has comfortably surpassed.
It may be noted, the article reminds, that Gujarat Rs 46,479 crore in direct tax during FY 2020-21 during the peak of Covid. The number rose 52% in the subsequent year reaching Rs 70,765 crore.
This rise is attributed to bullish markets that contributed to taxes paid on Long Term Capital Gains (LTCG). The improvement in Tax Deducted at Source (TDS) played a part in the tax collection, the report said.
The report adds that financial intermediary services, manufacturing industries and sectors such as water, gas and electricity in that order have been the highest tax-paying sectors in the state in the last two years.
There’s been a marked improvement in TDS collection too. It touched Rs 40,350 crore in FY 2022-23 as opposed to Rs31,140 crore in FY 2021-22, Rs23,325 crore in FY 2020-21 and Rs22,140 crore in FY 2019-20.
Even advance tax collections, the report highlighted, reached Rs 44,950 crore in FY 2022-23, against Rs 38,260 crore in FY 2021-22. Advance tax collections for FY 2020-21 reached Rs 27,450 crore.
Individual tax returns witnessed an upward trend. Self-assessment reporting shot up to Rs 10,100 crore in 2022-23 against Rs 8,650 crore in FY 2021-22 and Rs 6,830 crore in FY 2020-21. Regular assessment, which dropped from Rs 2,600 crore in FY 2020-21 to Rs 2,150 crore in FY 2021-22 picked up to reach Rs2,600 crore in FY 2022-23.
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