Direct Tax Collections Surge 182% Over Decade Reaching Over Rs 19.60 Trillion in FY24

Direct Tax Collections Surge 182% Over Decade Reaching Over Rs 19.60 Trillion in FY24

Direct tax collections in India have witnessed a remarkable surge of 182 percent over the past decade with the total amount exceeding Rs 19.60 trillion for the fiscal year 2023-24. This significant growth reflects the effectiveness of the tax reforms implemented during Prime Minister Narendra Modi's administration which has been in power since 2014.

According to the latest data released by the income tax department the corporate tax collections have more than doubled during this period climbing to over Rs 9.11 trillion by 2023-24. In addition personal income tax collections have seen a substantial increase nearly quadrupling to Rs 10.45 trillion. This robust growth in direct tax revenues is indicative of both improved compliance among taxpayers and the expansion of the tax base across the country.

In the first fiscal year of Modi's government in 2014-15 direct tax collections stood at approximately Rs 6.96 trillion. At that time corporate tax contributions were around Rs 4.29 trillion while personal income tax collections were reported at Rs 2.66 trillion. The growth in collections over the years has been bolstered by various initiatives aimed at enhancing the ease of tax compliance and expanding the taxpayer base.

The number of income tax returns filed including revised returns has more than doubled from over 4.04 crore in the 2014-15 fiscal year to over 8.61 crore in 2023-24. This increase in returns filed highlights a growing awareness and willingness among citizens to fulfill their tax obligations contributing to higher revenue collection.

Furthermore the direct tax-to-GDP ratio has improved from 5.55 percent in 2014-15 to 6.64 percent in 2023-24 illustrating the government's focus on increasing tax revenues relative to economic growth. Tax buoyancy which gauges the efficiency of revenue mobilization in relation to GDP growth has also seen a significant increase rising from 0.86 to 2.12 over the decade.

Additionally the number of taxpayers in India has increased significantly from 5.70 crore during the Assessment Year 2014-15 to 10.41 crore in the Assessment Year 2023-24. This growth reflects the government's continued efforts to broaden the tax base and promote compliance through various measures including digitalization and simplification of tax processes.

As the government continues to focus on enhancing tax collections and improving compliance the substantial increase in direct tax collections over the past decade serves as a testament to the effectiveness of its fiscal policies and initiatives aimed at promoting economic growth and sustainability.