India’s direct tax collections surged to Rs 15.60 lakh crore by February 10 in the current fiscal year, marking a significant 20.25% increase compared to the same period last year, according to recent data from the Central Board of Direct Taxes (CBDT). The net tax collection by February 10 amounts to 80.23% of the total revised estimate for the entire financial year. This remarkable growth can be attributed to better-than-expected economic growth and increased compliance, particularly in personal income tax.
Specifically, net collections from personal income tax saw a substantial year-on-year increase of 26.91% by February 10, while net revenue from corporate income tax also rose by 13.57% during this period. In the Interim Budget 2024-25 presented on February 1, Finance Minister Nirmala Sitharaman revised the direct tax revenue target for the current fiscal year to Rs 19.45 lakh crore from the earlier estimate of Rs 18.23 lakh crore, indicating a strong expectation of surpassing the budgetary estimate.
This surge in tax collection is part of a consistent trend witnessed in recent years. In the first nine months of the current fiscal year, 8.18 crore income tax returns (ITRs) were filed, representing a 9% increase compared to the total filed in the entire previous fiscal year 2022-23. In 2021-22, net direct tax collection stood at Rs 14.08 lakh crore, which increased to Rs 16.61 lakh crore in 2022-23 and is estimated to reach Rs 19.45 lakh crore in the current fiscal year.
The government aims to achieve a revenue target of Rs 21.99 lakh crore from direct taxes in the financial year beginning April 1, 2024. CBDT data reveals that gross collections from direct taxes up to February 10 amounted to Rs 18.38 lakh crore, reflecting a 17.30% increase compared to the same period last year. Gross collections from personal income tax saw a notable jump of 25.67%, while corporate income tax collections surged by 9.16% during this period. Refunds totaling up to Rs 2.77 lakh crore were issued from April 1, 2023, to February 10, 2024.
After adjusting for refunds, net growth in registered corporate income tax collections was 13.57%, and for personal income tax collections, it was 26.91%. When combined with securities transaction tax, personal income tax registered a growth of 27.17% year-on-year in net collections. Additionally, there has been an increase in indirect tax collections.
Revenue collection from Goods and Services Tax (GST) reached Rs 16.69 lakh crore in the first 10 months of the current fiscal year, marking an 11.6% increase compared to the same period last year. Strong tax revenues have helped in maintaining the fiscal deficit under control despite a significant increase in expenditure.
The fiscal deficit is estimated to decrease to 5.8% of GDP by the end of March 31, 2024, from the budgetary estimate of 5.9%. As of the April-December period, the Centre’s fiscal deficit stood at Rs 9.82 lakh crore, which is 55% of the full-year budgetary target of Rs 17.87 lakh crore, according to recent data from the Controller General of Accounts.
The government aims to increase revenue from taxes to Rs 38.31 lakh crore for the fiscal year 2024-25, which is 11.45% higher than the revised estimate of Rs 34.37 lakh crore for the current fiscal year. This includes targets of Rs 21.99 lakh crore from direct taxes and Rs 16.31 lakh crore from indirect taxes.
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