India's direct tax revenues have recorded a robust growth of 16.2% at Rs 25.86 lakh crore from April 1, 2024, to March 16, 2025, compared to the corresponding period in the last financial year, based on the latest figures released by the Income Tax Department.
Direct taxes comprise corporate tax, personal income tax, and securities transaction tax (STT). Collections of corporate tax increased to Rs 12.40 lakh crore in the current fiscal year from Rs 10.1 lakh crore in the same period last year.
Personal income tax collections also increased significantly to Rs 12.90 lakh crore from Rs 10.91 lakh crore in the last year.
STT collections also registered a steep increase, to Rs 53,095 crore, from Rs 34,131 crore in the last fiscal. Other taxes, such as wealth tax, dipped marginally, from Rs 3,656 crore to Rs 3,399 crore.
After adjusting for refunds, which increased by 32.51% to Rs 4.6 lakh crore, the net direct tax collection was Rs 21.26 lakh crore, a 13.13% rise over Rs 18.8 lakh crore in the corresponding period last year.
The phenomenal increase in tax revenues is an indicator of a strong macroeconomic landscape, which gives the government additional resources to invest in big-ticket infrastructure projects, accelerate economic growth, and roll out welfare initiatives for the underprivileged.
This increase in collection also helps to maintain the fiscal deficit in line. A lower fiscal deficit means the government borrows less, leaving more money in the banking system for companies to borrow and invest. This, in turn, stimulates greater economic growth and employment.
Additionally, a managed fiscal deficit keeps inflation on track, maintaining economic stability and consistent growth.
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