Advance tax paid by companies in the first quarter of the current financial year rose 46 per cent more than the corresponding period of the previous fiscal year there will be a robust growth in tax collection, which will help the government to absorb the high subsidy bill to a certain extent.

Total advance tax collection, including corporate and personal income tax, soared 48 per cent to Rs 42,679 crore in the first quarter of the current financial year. It is important to note that about Rs 26,798.6 crore was received under the corporate advance tax in Q1, as against Rs 18,357.5 crore in the same period last year.

Likewise, advance payment of personal income tax stood at Rs 15,881 crore in Q1, up 52.4 per cent from Rs 10,422 crore in the first quarter of last year. These are provisional figures reported between April 1 and June 15 (the deadline for the first instalment of advance tax) and they are likely to be revised, according to a report in Business Standard.

“The figures are expected to be revised as information is awaited from banks,” a government source told the financial daily.

The final figures for the first instalment of advance tax collection will come from June 17 to 18. The total direct tax collection in Q1 of the current fiscal stood at Rs 2.81 lakh crore, which is 51 per cent higher than Rs 1.85 lakh crore in the corresponding period of the previous fiscal. The direct tax collection target for FY23 has been set at Rs 14.20 lakh crore. Citing sources, the publication mentioned that as of June 15, the Centre has received Rs 3.10 lakh crore as taxes.

At present, the Centre is grappling with global macroeconomic challenges to ensure sustainable growth, contain sky-high inflation and stabilise the rupee. Last month, the government cut excise duty on petrol and diesel and announced a concession in customs duty on certain items in an earnest attempt to quell inflation.

Earlier this month, Revenue Secretary Tarun Bajaj had said that there could be some impact on advance tax collection because of lower tax collections from oil marketing companies. The total tax collection during the financial FY23 has been estimated at Rs 27.58 lakh crore in the budget, about 9.6 per cent higher than the revised estimate of Rs 25.16 lakh crore for the last financial year.