Covid-19 impact: Direct tax refunds down 16% to Rs 64,428 crore in Q1

Corporation tax refunds stood at Rs 40,482 crore, while income tax refunds stood at Rs 23,828 crore in Q1FY21.

Direct tax refunds fell 16 per cent in the first quarter of the current fiscal year (Q1FY21), despite the government having fast-tracked the process. Refunds, or cash outflow from the income tax department, stood at Rs 64,428 crore at the end of June 2020, compared to Rs 76,575 crore at end-June 2019.

Tax officials have attributed the decline to slim attendance (caused by the lockdown), which, according to them, led to a delay in clearance of large refunds that require officers’ approval. To fight the economic fallout of Covid, the government had expedited refunds of up to Rs 5 lakh. The