The overall direct tax collection gap has improved from the earlier 22% at the beginning of November to 13%. All the credit goes to the advance tax collections from companies for the December 15 installment, recording a growth of 49% indicating prospects of better corporate earnings. However, advance tax collections under personal income tax are still in the negative zone.

 According to Government sources, after reconciliation of bank data, advance tax collection under corporate tax was ₹1.09 lakh crore for the third installment as against ₹73,126 crores in the corresponding installment of FY20. In the case of personal income tax, collection through the third installment of advance tax was ₹31,054 crores as against ₹ 32,910 crores showing a decline of 5.6%. But, the sum of all three installments of advance tax under corporate tax is still in the negative zone. The good news is that the dip in overall direct tax collection has slowed down.

December 15 was the last date of the third installment under the direct tax. According to Section 208 of the Income Tax Act, Assessees, excluding those above the age of 60 not running any business, having estimated TDS (Tax Deducted at Sources)/TCS (Tax Collected at Source) for the year as ₹10,000 or more, are required to pay their tax in advance, in the form of advance tax. This advance tax is to be paid in four installments (15% of the total by June 15, 45% of the total by September 15, 75% of the total by December 15, and 100% of the total amount by March 15).