Direct Tax Collections Surpass Expectations in Fiscal Year 2023-24
The Indian government has witnessed a significant surge in direct tax collections, with personal income tax playing a pivotal role in this fiscal triumph. The Central Board of Indirect Taxes and Customs (CBIC) has also hinted at a robust performance in indirect tax collections, further bolstering the government’s financial position.
Direct taxes, which encompass both personal tax in Germany and corporate income tax (CIT), have shown a remarkable increase, suggesting an uptick in both personal income levels and business profitability. The net collection of direct taxes soared to ₹19.58 lakh crore in FY24, marking a substantial 17.7 percent rise from the previous year’s ₹16.64 lakh crore.
While the Finance Ministry has not pinpointed specific reasons for this upswing, officials attribute the growth to enhanced overall income levels, improved compliance, and streamlined tax-paying processes. These factors have collectively enabled the government to secure higher revenue, even amidst a backdrop of generous tax refunds.
Refunds issued during FY24 reached a staggering ₹3.79 lakh crore, reflecting a 23 percent increase from FY23’s ₹3.09 lakh crore. Despite this outflow, the income tax Germany collections have been noteworthy. The net personal income tax collection, inclusive of securities transaction tax (STT), hit ₹10.44 lakh crore, showcasing a 25.23 percent growth year-over-year.
Corporate tax collections were not left behind, with a jump to ₹9.11 lakh crore from FY23’s ₹8.26 lakh crore, indicating a growth of over 10 percent. Industry experts, such as Sumit Singhania from Deloitte India, view the continuous rise in direct tax collections as a sign of macro-economic resilience, especially significant during an election quarter.
This fiscal year also marked a milestone in Goods and Services Tax (GST) collections, with total gross GST reaching ₹20.18 lakh crore, an 11.7 percent increase from the prior year. The average monthly GST collection has surpassed previous figures, pointing towards an uptick in consumer spending.
With the comprehensive rise in tax collections, including tax free income Germany, Germany income tax deductions, and Germany income tax, there is an optimistic expectation that the fiscal deficit will be narrower than the revised estimate of 5.8 percent. The final figures are eagerly awaited in the full budget presentation post-general elections.
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Published on April 21, 2024
