Net Direct Tax Collection in India Surges by 19.41%

The net direct tax collection in India has witnessed a substantial increase of 19.41 per cent during the current fiscal year, reaching Rs 14.70 lakh crore. This remarkable growth represents approximately 81 per cent of the targeted amount for the entire financial year, as reported by the income tax department on Thursday.

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Steady Growth in Direct Tax Collections

The provisional figures of Direct Tax collections up to January 10, 2024, indicate a consistent growth trend. The Central Board of Direct Taxes (CBDT) highlighted this positive development in a recent statement.

Key Highlights of Direct Tax Collection

The net Direct Tax collection, after deducting refunds, stands at an impressive Rs 14.70 lakh crore. This figure reflects a significant 19.41 per cent increase compared to the net collection during the corresponding period of the previous year.

Furthermore, this collection constitutes 80.61 per cent of the total Budget Estimates for Direct Taxes for the financial year 2023-24. The government had set a target of Rs 18.23 lakh crore from direct taxes, including personal income tax and corporate tax, indicating a 9.75 per cent increase from the Rs 16.61 lakh crore collected in the previous fiscal year.

Refund Issuances

During the period from April 1, 2023, to January 10, 2024, a substantial amount of Rs 2.48 lakh crore was issued as refunds.

Gross Collections and Growth Rates

The gross collections of direct taxes have reached Rs 17.18 lakh crore, demonstrating a notable 16.77 per cent increase compared to the gross collection during the corresponding period of the previous year.

The growth rate in gross Corporate Income Tax (CIT) stands at 8.32 per cent, while the growth rate in gross Personal Income Tax (PIT) is recorded at an impressive 26.11 per cent.

Net Growth after Refund Adjustments

After adjusting for refunds, the net growth in CIT collections is a commendable 12.37 per cent, and the net growth in PIT collections is an even more impressive 27.26 per cent.

Expert Opinions

Commenting on these figures, Rohinton Sidhwa, Partner at Deloitte India, expressed that this robust growth is a strong indication of the economy's expansion. He also highlighted the effectiveness of measures taken to identify and increase reporting, which have contributed to these positive gains.

Gouri Puri, Partner at Shardul Amarchand Mangaldas & Co, attributed the higher compliance and direct tax collections to the government's multi-pronged approach to formalize the economy. This approach includes the development of digital payments infrastructure, ensuring a record trail through the GST registration system, and increasing digital data sources through third-party reporting under TDS and TCS.

The substantial growth in net direct tax collection in India is a testament to the country's economic resilience and the effectiveness of measures implemented to enhance tax compliance. As the economy continues to expand, the government's focus on formalizing the economy and leveraging digital technologies is likely to further bolster direct tax collections in the future.