Direct tax mop-up rises 18% in FY24; tops RE by ₹13,000 crore

A big boost from personal income tax helped the government mop up over ₹19.58-lakh crore through direct taxes in fiscal 2023-24. With this, the collections have exceeded both budget estimates (BE) and revised estimates (RE).

The Central Board of Indirect Taxes and Customs (CBIC) has already announced that overall indirect tax collection, including customs and central excise duty, has exceeded RE by a handsome margin, though it is yet to make the figures public.

According to a Finance Ministry statement, net collection of direct taxes (gross collection minus refunds) rose to ₹19.58lakh crore in FY24 — 17.7 per cent higher than ₹16.64-lakh crore of FY23. Although the statement did not mention any reasons for the rise, oªcials said the increase in overall income level along with better compliance and ease of taxpaying enabled the government to collect higher revenue.

“Refunds of ₹3.79-lakh crore have been issued in FY24, an increase of around 23 per cent over ₹3.09-lakh crore issued in FY23,” the statement said.

HIGHER INCOME TAX

Personal income tax, paid by non-business entities including individuals on their income, yielded a very impressive number. “The net personal income tax collection (including STT; provisional) in FY24 was ₹10.44-lakh crore and has shown a growth of 25.23 per cent over ₹8.33-lakh crore of the preceding year,” the statement said. Further, net corporate tax collection rose to ₹9.11lakh crore (₹8.26-lakh crore), a growth of over 10 per cent.

Commenting on the number, Sumit Singhania, Partner with Deloitte India, said, “This is reassuring from the standpoint of continuity of fiscal discipline, which ought to allow the incoming administration to hit the ground running on policy reforms and keep the goal of improving taxpayers services at the core of tax reforms agenda,” he said.

With the rise in all taxes, the expectation is that the final number on the fiscal deficit would be less than the RE of 5.8 per cent.