India’s direct tax collections jumped to Rs 15.60 lakh crore till February 10 in the current financial year, registering a year-on-year (YoY) surge of 20.25%, promoted by a robust jump in personal income tax, as per the recent official data of Central Board of Direct Taxes (CBDT).
The net tax collection registered up to February 10 is 80.23% of the total revised estimate for the overall financial year. Better-than-expected economic growth and increased compliance have provided a fillip to income tax collections.
The net collections from personal income tax touched 26.91% YoY till February 10 in the current financial year. At the same time, net revenue from corporate income tax spiked by 13.57% during this particular period.
Revenue collection from direct taxes in FY 2023-24 is set to cross the budgetary estimate by Rs 1.22 lakh crore. In the Interim Budget 2024-25 presented on February 1, 2024, Finance Minister Nirmala Sitharaman shifted the direct tax revenue target for the current financial year to Rs 19.45 lakh crore from the earlier budgetary estimate of Rs 18.23 lakh crore.
A consistent spike in mop-up has been witnessed from direct taxes in recent years. In the first nine months of the current financial year, 8.18 crore income tax returns (ITRs) were filed, which is 9% more than the total of 7.51 crore ITRs filed in the full financial year 2022-23.
In 2021-22, the registered net direct tax collection was at Rs 14.08 lakh crore. It spiked to Rs 16.61 lakh crore in 2022-23 and is estimated to tip at Rs 19.45 lakh crore in the current financial year. The government has set its eyes on a target of Rs 21.99 lakh crore revenue from direct taxes in the financial year beginning April 1, 2024.
The CBDT data highlights that gross collections from direct taxes up to February 10 touched Rs 18.38 lakh crore, which is 17.30% higher than in the corresponding period of last year. Gross collections from personal income tax experienced a jump of 25.67%, while gross mop-up from corporate income tax surged by 9.16% during this particular period.
Refunds touching up to Rs 2.77 lakh crore have been issued from April 1, 2023, to February 10, 2024. After the adjustment of refunds, the net growth in registered corporate income tax collections was 13.57%, and that in personal income tax collections was 26.91%. Personal income tax, when clubbed with securities transaction tax, registered a growth of 27.17% YoY in net collections, as per data from CBDT.
Apart from direct taxes, there has been a jump in indirect tax collections as well. Revenue collection from Goods and Services Tax (GST) witnessed an uptick to Rs 16.69 lakh crore in the first 10 months of the current financial year, which is 11.6% higher than the collection during the same period last year.
Robust tax revenues have aided in keeping the fiscal deficit under check despite a significant jump in expenditure. Fiscal deficit, or the gap between the central government’s income and spending, is estimated to witness a dip to 5.8% of GDP in the year ending March 31, 2024, from the budgetary estimate of 5.9%.
The Centre’s fiscal deficit registered Rs 9.82 lakh crore in the April-December period, which is 55% of the full-year budgetary target of Rs 17.87 lakh crore, as per the recent Controller General of Accounts data.
The Centre has focused on increasing revenue from taxes to Rs 38.31 lakh crore for 2024-25; this is 11.45% higher than the revised estimate of Rs 34.37 lakh crore for the current fiscal year.
Meanwhile, the target for 2024-25 comprises Rs 21.99 lakh crore from direct taxes and Rs 16.31 lakh crore from indirect taxes.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.
