Direct Tax Collections and Advance Tax | Best Current Affairs For UPSC Preparation

2026-06-20 GS -3 (Indian Economy)MediumSource: Business Standard

Summary of News

India’s net direct tax collection increased by about 14.64% compared to last year and reached around ₹5.21 lakh crore by 17 June 2026.
This increase came from better collection of corporate tax, non-corporate tax and advance tax.
Advance tax collection also increased to around ₹1.78 lakh crore, showing a growth of about 15.30% from last year.
Advance tax means tax paid during the same year in which income is earned, instead of paying the full tax only after the financial year ends.

The first advance tax instalment for tax year 2026–27 was due on 15 June 2026 under the Income Tax Act, 2025.
The Income Tax Department clarifies that advance tax provisions have no major policy change under the Income Tax Act, 2025.
Advance tax is watched because it gives an early signal of expected incomes and profits.

It links with resource mobilisation and government budgeting.
It helps revise tax buoyancy, tax-to-GDP ratio, and direct versus indirect taxes.

Statement may confuse direct tax collection with indirect tax collection.
Statement may say advance tax is paid only by companies.
Statement may treat gross tax collection as equal to net tax collection.
Statement may infer that higher tax collection automatically means higher real GDP growth.

With reference to advance tax and direct tax collections in India, consider the following statements:

Advance tax is payable only by companies and not by individuals.
Under the Income Tax Act, 2025, advance tax is payable if the tax payable during the year is ₹10,000 or more.
A sharp rise in advance tax collections may indicate stronger income or profit expectations, but it does not by itself prove that nominal GDP has grown at the same rate.

Which of the statements given above are correct?

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