India’s Net Direct Tax Collections Surpass Estimates
In a recent financial update, the Ministry of Finance announced that the government’s net direct tax collections for the financial year 2023-24 have seen a robust increase, outpacing the revised estimates. After accounting for refunds, the collections amounted to Rs 19.58 lakh crore, marking a 17.7 percent rise from the previous year’s Rs 16.64 lakh crore.
The figures not only exceeded the revised estimate of Rs 19.45 lakh crore by 0.67 percent but also surpassed the initial Budget Estimates by a significant 7.40 percent. This performance indicates a strong uptick in revenue generation for the government.
Refunds for the financial year stood at Rs 3.79 lakh crore, which is a considerable increase of 22.74 percent over the last year’s refunds. Despite this uptick in refunds, the growth in tax collections remained substantial.
On a gross level, before adjusting for refunds, direct tax collections for the financial year 2023-24 reached Rs 23.37 lakh crore, representing an 18.48 percent growth over the previous year’s gross collection of Rs 19.72 lakh crore.
An interesting trend noted in the provisional estimates is that income tax collections have continued to outpace corporate tax collections. The gross corporate tax collection for FY24 was reported at Rs 11.32 lakh crore, while net corporate tax collection after refunds was Rs 9.11 lakh crore. These figures reflect a growth of 13.06 percent and 10.26 percent respectively over the previous financial year.
In contrast, gross personal income tax collection, which includes Securities Transaction Tax (STT), stood at an impressive Rs 12.01 lakh crore for FY24. This is a significant jump of 24.26 percent from the previous year. The net personal income tax collection, after adjusting for refunds, showed an even more remarkable growth of 25.23 percent, totaling Rs 10.44 lakh crore.
The Ministry of Finance’s report underscores the government’s effective fiscal management and the buoyancy of India’s tax base, as reflected in the substantial growth of both corporate and personal income tax collections.
