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Indian Express
9 hours ago
- Business
- Indian Express
Advance tax collection growth slows to 3.9%, income tax mop-up lower than FY25 level
Advance direct tax collections from the first installment in the current financial year 2025-26 grew by 3.87 per cent to Rs 1.56 lakh crore as on June 19 this year, slower than the growth of 27.34 per cent seen in the same period a year ago, data released Saturday by the Income Tax Department showed. While advance tax collections during April 1-June 19 for corporate tax grew 5.86 per cent to Rs 1.22 lakh crore, personal income tax or non-corporate tax collections recorded a slowdown, with advance collections falling by 2.68 per cent to Rs 33,928.32 crore. The advance tax collections for personal income at Rs 33,928.32 crore are lower than the first installment collections of Rs 34,863.78 crore seen in the previous financial year 2024-25 (as on June 19, 2024). The slower growth in advance tax collections for personal income tax seems to be more pronounced, a possible indication of the impact of the income tax cuts undertaken in the Budget as well as slowing income growth. Non-corporate tax includes taxes paid by individuals, Hindu Undivided Families (HUFs), firms, Association of Persons (AoPs), Body of Individuals (Bols), local authorities, artificial juridical persons. Every person, whose estimated tax liability for the financial year is Rs 10,000 or more, is required to pay his or her taxes in advance in the form of 'advance tax'. The advance tax has to be paid in four installments during the year. The first installment has to be paid on or before June 15 with payment of not less than 15 per cent of the advance tax. The second installment has to be paid on or before September 15 with 45 per cent advance tax as reduced by the amount paid in the earlier installment. The third installment requires 75 per cent to be paid on or before December 15, followed by 100 per cent payment on or before March 15. Overall, growth in net direct tax collections so far until June 19 also slipped into negative territory, declining 1.39 per cent to Rs 4.59 lakh crore from Rs 4.65 lakh crore in the corresponding period of the previous financial year. The net collections were lower as refunds increased by 58 per cent to Rs 86,385 crore until June 19 this year. Gross direct tax collections, however, rose 4.86 per cent to Rs 5.45 lakh crore this fiscal. Net corporate tax collections slowed to Rs 1.73 lakh crore, down 5.13 per cent from the year-ago period. Personal income tax or non-corporate tax collections increased marginally by 0.7 per cent to Rs 2.73 lakh crore. Securities Transaction Tax (STT) increased by 12 per cent to Rs 13,013 crore during the period. Aanchal Magazine is Senior Assistant Editor with The Indian Express and reports on the macro economy and fiscal policy, with a special focus on economic science, labour trends, taxation and revenue metrics. With over 13 years of newsroom experience, she has also reported in detail on macroeconomic data such as trends and policy actions related to inflation, GDP growth and fiscal arithmetic. Interested in the history of her homeland, Kashmir, she likes to read about its culture and tradition in her spare time, along with trying to map the journeys of displacement from there. ... Read More
Indian Express
21-04-2025
- Business
- Indian Express
RBI mandates 2.5% additional run-off factor on digital deposits
The Reserve Bank of India (RBI) on Monday eased the liquidity coverage ratio (LCR) norms under which the banks will now be required to assign an additional 2.5 per cent run-off factor for digital deposits. 'A bank shall assign an additional 2.5 per cent run-off factor for retail deposits which are enabled with internet and mobile banking facilities (IMB),' the RBI said final norms on LCR framework. The run-off factor refers to the percentage of deposits that could be withdrawn by depositors in a stress scenario. Internet and Mobile Banking facilities (IMB) includes all facilities such as but not limited to internet banking, mobile banking and Unified Payments Interface (UPI) which enables a customer to digitally transfer funds from their accounts. The lower run-off factor will be a relief for banks as the draft norms had proposed an additional 5 per cent run-off factor for retail deposits which are enabled with (IMB). The regulator said that the stable retail deposits enabled with IMB will have 7.5 per cent run-off factor and less stable deposits enabled with IMB will have 12.5 per cent run-off factor (as against 5 and 10 per cent respectively, prescribed currently). RBI said that funding from non-financial entities such as trusts (educational/religious/charitable), Association of Persons (AoPs), partnerships, proprietorships, Limited Liability Partnerships (LLPs) and other incorporated entities will be categorised as funding from non-financial corporates and attract a run-off rate of 40 per cent as against 100 per cent currently. Unsecured wholesale funding provided by non-financial small business customers (SBCs) will be accorded the same treatment as retail deposits and so will attract an additional 2.5 per cent run-off factor. The final guidelines said that the level 1 high quality liquidity asset (HQLA) in the form of government securities will be valued at an amount not greater than their current market value, adjusted for applicable haircuts in line with the margin requirements under the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF). 'These amendments would help improve the liquidity resilience of banks in India and would further align the guidelines with global standards while ensuring that such an enhancement is done in a non-disruptive manner,' the RBI said. The new norms will come into effect from April 1, 2026, and will be applicable to all commercial banks (excluding payments banks, regional rural banks and local area banks). According to Anil Gupta, Senior Vice President – Financial Sector Ratings, ICRA, As per RBI's estimate, the reported LCR of the banking system will improve by 6 per cent as of December 31, 2024. 'With an estimated HQLA of almost Rs 45-50 lakh crore for the banking system, this could free up the lendable resources by almost Rs 2.7-3 lakh crore and support the credit growth of the banks,' he said. This headroom can be equivalent to 1.4-1.5 per cent of additional credit growth potential for the banking system.
