India sees significant growth in net direct tax collections

The Central Board of Direct Taxes (CBDT) said the net direct tax pool is Rs 5.74 lakh crore, with Corporation Tax (CIT) at Rs 2.1 lakh crore.

Impressive Growth in Direct Tax Collections

India’s net direct tax collections have seen a notable increase of 19.54 percent, reaching Rs 5.74 lakh crore by July 11 in the current financial year.

This marks a substantial rise compared to Rs 4.80 lakh crore collected during the same period in the previous financial year (FY24), as reported by the Income Tax Department.

Breakdown of Collections

The Central Board of Direct Taxes (CBDT) detailed that the net direct tax collection of Rs 5.74 lakh crore includes:

• Corporation Tax (CIT): Rs 2.1 lakh crore (net of refunds)
• Personal Income Tax (PIT): Rs 3.46 lakh crore
• Securities Transaction Tax (STT): Rs 16,634 crore (net of refunds)

Increase in Tax Refunds

The government has also issued direct tax refunds amounting to Rs 70,902 crore by July 11 in FY25, which is a significant 64.49 percent increase compared to Rs 43,105 crore issued in the same period of FY24.

Targeted Fiscal Deficit and Estimates

For the full fiscal year (April-March), the government had set a revised estimate for direct tax collection at Rs 21.99 lakh crore. Robust tax collection is crucial for the government to meet its fiscal deficit target, which is aimed at 5.2 percent for FY25, as outlined in the interim budget.

Gross Direct Tax Collection

On a gross basis, before accounting for refunds, the tax collection stood at Rs 6.45 lakh crore by July 11 in FY25, reflecting a 23.24 percent growth over the same period last year.

Understanding Direct Taxes

Taxes are levied on the income or profit of individuals or corporations and are paid directly to the government without intermediaries. Common examples of direct taxes include:

• Income Tax
• Property Tax
• Corporate Tax
• Wealth Tax
• Gift Tax
• Securities Transaction Tax (STT)
• Capital Gains Tax

Conclusion

The healthy growth in tax collections underscores India’s strong fiscal performance, aiding the government’s efforts to manage its fiscal deficit and achieve economic stability.

This increase not only reflects improved compliance and collection efficiency but also supports the broader economic objectives of the nation.