Data released on Sunday showed that its net direct tax collections in 2023-24 hit ₹19.58 trillion, up 17.7% from 2022-23. This could be good news on two counts.
Summary
- Data released on Sunday showed that its net direct tax collections in 2023-24 hit ₹19.58 trillion, up 17.7% from 2022-23. This could be good news on two counts.
The past year seems to have turned out better than expected for India's government, at least fiscally. Data released on Sunday showed that its net direct tax collections in 2023-24 hit ₹19.58 trillion, up 17.7% from 2022-23. The figure exceeded what was initially budgeted on this account by ₹1.35 trillion and the revised figure mentioned in the interim budget by ₹13,000 crore.
A breakdown of the mop-up shows net corporate tax collections were up 10.3%, while net income tax collections rose 25.2%. Both categories have shown buoyancy, although the income-tax rise is more noteworthy on two key counts. One, greater tax being paid is a likely sign of higher earnings, indicative of prosperity among those in the tax-paying bracket. And two, it could indicate an expansion of our tax base.
Given how few Indians pay direct taxes, any expansion in taxpayer numbers would help widen out the burden of funding government expenditures. The scope for improvement on this front is immense. Since indirect taxes are regressive, direct tax revenues must ideally outpace GST intake. When it comes to fiscal deficit commitments, though, who bears the burden is irrelevant. All increases are good.