India’s net direct tax collection, comprising corporate tax and personal income tax, has surged by 14.69% to exceed ₹17.78 lakh crore as of February 10 in the current financial year, compared to ₹15.51 lakh crore during the same period in 2023-24, according to data released by the Central Board of Direct Taxes (CBDT) on Tuesday.
The gross direct tax revenue also saw a significant rise, growing by 19.06% to surpass ₹21.88 lakh crore, up from ₹18.38 lakh crore in the corresponding period of 2023-24.
Revenue from net non-corporate taxes, primarily personal income tax, witnessed a strong 21% year-on-year growth, reaching ₹9.48 lakh crore. Meanwhile, net corporate tax collection increased by over 6% to more than ₹7.78 lakh crore between April 1, 2024, and February 10, 2025.
Additionally, net collections from the Securities Transaction Tax (STT), which is also part of direct taxes, surged by an impressive 65% to ₹49,201 crore so far this financial year.
During this period, refunds amounting to over ₹4.10 lakh crore were issued, marking a 42.63% increase from the previous year. Senior officials attribute this to the improved efficiency of the Income Tax Department in processing refunds.
The robust double-digit growth in direct tax collections reflects a thriving economy, with rising corporate profits and increasing incomes due to job creation in the manufacturing and services sectors.
The strong tax inflow enhances macroeconomic stability by providing the government with more funds to invest in large-scale infrastructure projects and welfare schemes for the underprivileged.
Additionally, higher tax revenues help control the fiscal deficit. A lower fiscal deficit reduces the government’s borrowing needs, ensuring that more liquidity remains in the banking system for businesses to invest and expand. This, in turn, boosts economic growth and job creation.
Moreover, a lower fiscal deficit helps keep inflation in check, promoting economic growth with stability.
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