Saturday, 06 Jul, 2024
A direct tax is one that is paid by an individual or group of individuals directly to the body that levied it. Image Source: IANS
The net direct tax collection increased to Rs 4,62,664 crore from April 1 to June 17 in the current fiscal as compared to Rs 3,82,414 crore in the corresponding period of the previous financial year (2023-24),
India’s net direct tax collections have increased by 21 percent year-on-year to over Rs 4.62 lakh crore in the current financial year up to June 17, 2024. The net direct tax collection increased to Rs 4,62,664 crore from April 1 to June 17 in the current fiscal as compared to Rs 3,82,414 crore in the corresponding period of the previous financial year (2023-24), representing an increase of 20.99 percent.
The net direct tax collection of Rs 4,62,664 crore includes Corporation Tax (CIT) at Rs 1,80,949 crore (net of refund) and Personal Income Tax (PIT) including Securities Transaction Tax (STT) at Rs 2,81,013 crore (net of refund).
The preliminary estimates of the gross collection of direct taxes (before accounting for refunds) for the Financial Year 2024–25 indicate a growth of 22.19 percent over the collections of the previous Financial Year, coming in at Rs 5,15,986 crore as opposed to Rs 4,22,295 crore in the same period of the previous Financial Year.
The Gross collection of Rs 5,15,986 crore includes Corporation Tax (CIT) at Rs 2,26,280 crore and Personal Income Tax (PIT) including Securities Transaction Tax (STT) at Rs 2,88,993 crore. Advance tax (Rs 1,48,823 crore), tax deducted at source (Rs 3,24,787 crore), self-assessment tax (Rs 28,471 crore), regular assessment tax (Rs 10,920 crore), and tax under other minor heads (Rs 2,985 crore) make up the minor head wise collection.
Based on data from the Indian government, over the last ten years, the number of taxpayers filing income tax returns has more than doubled to 7.78 crore. According to CBDT figures, the total number of Income Tax Returns (ITRs) filed in FY23 was 7.78 crore, which represents a 104.91 percent increase over the 3.8 crore ITRs filed in 2013–14.
*Up to June 17, 2024
Source: Reserve Bank of India
The central government’s direct tax collection has increased more than four times in last 12 years. The direct tax collection in the FY2010-11 was Rs 4,45,994 crore this increased to Rs 8,49,713 crore in FY2016-17 and now it has further increased to Rs 16,61,000 crore in FY2022-23.
A direct tax is one that is paid by an individual or group of individuals directly to the body that levied it. For instance, an individual taxpayer may pay direct taxes to the government for a variety of reasons, such as income tax, real estate tax, personal property tax, or asset taxes. According to the sources from revenue department, the reasons for high tax collection are adoption of digital initiatives aimed at simplifying compliance and expansion of the tax base in recent years
According to the time series data provided by the Central Board of Direct Taxes (CBDT), direct tax buoyancy, a measure of growth in the collection of personal income tax and corporation tax versus the growth in GDP rose to 2.52 in FY22, the highest level in the previous 15 years. A higher buoyancy indicates more effective tax collection. The highest buoyancy, 2.59, was observed in FY03, while it became negative (-1.21) in FY20. The CBDT highlighted the data for 22 years beginning in 2000–21. Tax buoyancy was not calculated for FY21 because both GDP and tax growth were negative. So buoyancy increased in FY22, most likely as a result of a low base effect.
According to the data released by the Central Board of Direct Taxes (CBDT), India’s direct tax to GDP ratio hit a 15 year high of 6.11 percent in 2022-23. According to the data, direct taxes' share of overall tax collections has returned to pre-pandemic levels. Direct taxes primarily consist of corporation and personal income taxes. Direct tax revenue increased to 54.62 percent of total tax income in 2022–23 from 52.27 percent in 2021–22 and 46.84 percent in 2020–21, the lowest percentage in fifteen years.
Manish Garg, lead-transfer pricing and litigation at AKM Global, a tax and consulting firm said increased formalization, use of technology and strong economic growth are contributing to direct tax buoyancy. It can also be attributed to an increasing number of scrutiny cases, a sharp focus on advance tax collection and faceless assessments.
