India’s direct tax collections surged to Rs 15.60 lakh crore by February 10 in the ongoing fiscal year, marking a substantial 20.25% increase compared to the previous year. This robust growth was primarily driven by a significant jump in personal income tax collections, according to recent data from the Central Board of Direct Taxes (CBDT).
As of February 10, the net tax collection accounted for 80.23% of the total revised estimate for the entire financial year. The impressive performance has been attributed to better-than-expected economic growth and improved compliance.
Notably, collections from personal income tax soared by 26.91% year-on-year, while revenue from corporate income tax also saw a healthy increase of 13.57% during the same period. The strong momentum in tax collections is expected to surpass the budgetary estimate for the fiscal year 2023-24 by Rs 1.22 lakh crore.
In the Interim Budget for 2024-25 presented on February 1, Finance Minister Nirmala Sitharaman revised the direct tax revenue target for the current financial year to Rs 19.45 lakh crore, up from the earlier estimate of Rs 18.23 lakh crore.
The trend of rising tax collections has been consistent in recent years. In the first nine months of the current fiscal year, 8.18 crore income tax returns (ITRs) were filed, marking a 9% increase compared to the total filings in the previous fiscal year. In 2021-22, net direct tax collection stood at Rs 14.08 lakh crore, which rose to Rs 16.61 lakh crore in 2022-23.
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, showing a significant increase of 17.30% compared to the corresponding period last year.
Gross collections from personal income tax witnessed a notable surge of 25.67%, while corporate income tax collections grew by 9.16% during the same period. Refunds totaling Rs 2.77 lakh crore were issued from April 1, 2023, to February 10, 2024. After adjusting for refunds, the net growth in corporate income tax collections stood at 13.57%, and personal income tax collections grew by 26.91%. When combined with securities transaction tax, personal income tax registered a growth of 27.17% year-on-year in net collections.
In addition to direct taxes, there has been a notable increase in indirect tax collections. Revenue from Goods and Services Tax (GST) rose to 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.
The robust tax revenues have helped in containing the fiscal deficit despite a significant rise in expenditure. The Centre’s fiscal deficit is estimated to decline to 5.8% of GDP by the end of the fiscal year ending March 31, 2024, down from the budgetary estimate of 5.9%.
As of the April-December period, the Centre’s fiscal deficit reached Rs 9.82 lakh crore, representing 55% of the full-year target of Rs 17.87 lakh crore, according to recent data from the Controller General of Accounts. Looking ahead to the fiscal year 2024-25, the Centre aims to increase tax revenue to Rs 38.31 lakh crore, reflecting an 11.45% increase from the revised estimate for the current fiscal year.
This target includes Rs 21.99 lakh crore from direct taxes and Rs 16.31 lakh crore from indirect taxes.
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