New Delhi: Income Tax refunds are expected to be delayed this year as the government is trying hard to meet its budgeted revenue targets. The money retained is expected to show a less weak government balance sheet by the end of year, which will help keep the fiscal deficit within budgeted limits.
The process is expected to roll-over expenditure till next year. According to a report published in Hindustan Times, the outstanding dues will be paid off within the first quarter of the next fiscal i.e. from April to June 2015 bracket.
The government owes such refunds in bulk to companies which pay their taxes in advance every quarter based on their projected incomes. These taxes are eventually netted out with their actual incomes.
This year the companies have paid taxes much higher than what they would have paid on their actual incomes.
Media reports have disclosed that due to the slowing economy, the gap between the budgeted target and the actual collection is quite huge and hence the tax officials are asked to go slow on tax refunding especially in the last quarter of the current fiscal.
In the budget, the government had targeted to collect gross direct tax revenues — corporate income tax, personal income tax and wealth tax — of Rs 7.36 lakh crore, up 15% from the last year's Rs 6.36 lakh crore. However, till January, the government was able to collect only Rs 5,78,715 crore as gross direct taxes which is only 70% of the estimated value.
Overall, it is speculated that keeping the fiscal deficit within 4.1% of the GDP will be critical for the government.
Analysts said that rolling over tax refund payments to the next year is not an uncommon practice.
