The government of India’s net direct tax collection (after refunds) in 2023-24 was Rs 19.58 trillion ( 19.58 lakh crore). The Central Board of Direct Taxation (CBDT) released the latest direct tax figure on 21 April 2024. In the Union Budget, the government has set a direct tax collection target of Rs.18.23 lakh crore for 2023-24, which was later revised to Rs.19.45 lakh crore. The final net collection was over Rs 13000 crore, above the revised estimates.In 2022-23, the net direct tax collection was Rs16.64 lakh crore. The direct tax collection in 2023-24 has shown an increase of 17.70%.The Gross direct tax collection (before adjusting for refunds) for 2023-24 was Rs.23.37 lakh crore, compared to Rs 19.72 lakh crore in 2022-23, a growth of 18.48%.
Personal Income Tax, the single largest source of Direct Tax
- In 2023-24, the personal income tax, including STT(Securities Transaction Tax), emerged as the Indian government’s largest direct tax source. It replaced the corporate tax as the central government’s largest direct tax source.
Personal Income Tax
- According to the CBDT, the gross personal income tax, including STT, during 2023-24 was Rs 12.01 lakh crore, a growth of 24.26% compared to 2023-24.
- The net personal income tax collection (including STT) in 2023-24 was Rs 10.44 lakh crore as compared to Rs 8.33 lakh crore in 2022-23, a growth of 25.23%.
Corporate Tax
- The gross corporate tax collection in 2023-24 was Rs 11.32 lakh crore as compared to Rs 10 lakh crore in 2022-23, a growth of 13.06%.
- The net corporate tax collection (after refund) in 2023-24 was Rs. 9.11 lakh crore compared to Rs 8.26 lakh crore in 2022-23, a growth of 10.26%.
- Net Refunds – In 2023-24 the government of India refunded Rs 3.79 lakh crore to the taxpayers compared to Rs 3.09 Lakh crore in 2022-23, a growth of 22.74%.
Reason for increase in Tax collection
- The government’s tax collection has increased in the past few years. There are a few reasons for better tax collection. Some of the reasons are :
- Better monitoring and processing of taxpayer data, as well as sharing indirect tax and another database, have helped track those not disclosing their income accurately.
- The income tax authorities are using high-value transactions, investments, and cash transactions to get taxpayers to declare their income.
- The tax compliance rate is also increasing in India, with more and more people voluntarily paying taxes.
- The government has widened the tax base in India.
Target for Tax Collection in 2024-25
- In the interim Union budget 2024-25, the government of India has set a direct tax collection target of Rs 21.98 lakh crore.
- The indirect tax collection target has been set up at Rs 16.3 lakh crore.
Corporate Tax, Personal Income Tax and STT
- Income tax is levied on the income of an individual or a company in a financial year (April to March) as specified in the Income Tax Act 1961. The tax levied on a person’s income is called Personal Income Tax. Income tax levied on the profit earned by the companies is called corporate tax.
- The central government can levy personal income tax and corporate tax all over India.
- However, in Sikkim, the state government has the power to levy personal income tax on the state’s residents.
- Also, the state government in India has the power to levy personal income tax on agricultural income.
- Securities Transaction tax (STT) is levied on specified securities bought and sold on a recognised stock exchange in India. The STT is levied on equities (shares), derivatives, and units of equity-oriented mutual funds.
Central Board of Direct Taxation (CBDT)
- The Central Board of Direct Taxation (CBDT) is a statutory body established under the Central Board of Revenue Act 1963.
- It comes under the Union Ministry of Finance.
- It is the apex body which deals with the levy and collection of direct taxes in India.
- Headquarters: New Delhi
- Chairperson: Nitin Gupta