India’s direct tax collections surged to Rs 15.60 lakh crore by February 10 in the current fiscal year, marking a notable year-on-year increase of 20.25%, primarily driven by a robust rise in personal income tax, according to recent official data from the Central Board of Direct Taxes (CBDT).
As of February 10, the net tax collection stands at 80.23% of the total revised estimate for the fiscal year. The uptick in income tax collections can be attributed to better-than-expected economic growth and enhanced compliance.
Personal income tax collections saw a substantial year-on-year increase of 26.91% by February 10, while corporate income tax revenues also spiked by 13.57% during the same period.
Revenue from direct taxes for FY 2023-24 is poised to exceed the budgetary estimate by Rs 1.22 lakh crore. In the Interim Budget 2024-25, presented on February 1, 2024, Finance Minister Nirmala Sitharaman revised the direct tax revenue target for the fiscal year to Rs 19.45 lakh crore from the previous estimate of Rs 18.23 lakh crore.
A consistent rise in tax collections has been observed 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 of 7.51 crore ITRs filed in the entire FY 2022-23.
Gross collections from direct taxes until February 10 amounted to Rs 18.38 lakh crore, reflecting a 17.30% increase compared to the corresponding period last year. Gross collections from personal income tax surged by 25.67%, while those from corporate income tax grew 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 corporate income tax collections stood at 13.57%, and in personal income tax collections at 26.91%. Personal income tax, combined with securities transaction tax, recorded a 27.17% year-on-year growth in net collections, according to CBDT data.
In addition to direct taxes, there has been an 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 fiscal year, marking an 11.6% increase compared to the same period last year.
Strong tax revenues have helped maintain fiscal discipline despite a significant rise in expenditure. The fiscal deficit is expected to decrease to 5.8% of GDP by the end of FY 2023-24, down from the budgetary estimate of 5.9%. In the April-December period, the Centre’s fiscal deficit reached Rs 9.82 lakh crore, accounting for 55% of the full-year budgetary target of Rs 17.87 lakh crore, according to recent data from the Controller General of Accounts.
The Centre aims to increase tax revenue to Rs 38.31 lakh crore for FY 2024-25, representing an 11.45% increase over the revised estimate of Rs 34.37 lakh crore for the current fiscal year. The target for 2024-25 includes Rs 21.99 lakh crore from direct taxes and Rs 16.31 lakh crore from indirect taxes.