India's net direct tax collections surged a healthy 15.88% to Rs 16.90 lakh crore in the period from April 1, 2024-January 12, 2025 of the current fiscal compared to the same period last fiscal year as per the figures released by the Income Tax Department.
Gross direct tax collections before refunds jumped 19.94% to Rs 20.64 crore during the period compared with the corresponding figure of Rs 17.21 lakh crore in the same period of the previous year.
Personal income tax collections during the period increased by 21.6 per cent to Rs 8.74 lakh crore compared with Rs 7.2 lakh crore in the previous year, while corporate tax collection rose by 8.12 per cent to Rs 7.7 lakh crore compared with Rs 7.10 lakh crore in the same period of 2023-24.
STT collection, which is also a direct tax, increased by 75 per cent to Rs 44,500 crore in the same period, as against Rs 25,415 crore for the same period of the last year.
The refunds stood at Rs 3.74 lakh crore during the period, a growth of 42.5 per cent on year-on-year basis.
The buoyancy in tax collections reflects a good macroeconomic financial position with the government raising more funds to undertake investments in large infrastructure projects to spur economic growth and take up welfare schemes for the poor.
It also keeps the fiscal deficit under control. The less fiscal deficit implies the government borrows less and hence, the money available in the banking system increases, through which large firms can borrow and invest. It then results in an increased economic growth rate and creates more jobs.
Except for that, a low fiscal deficit keeps inflation under control; hence, the reforms strengthen the fundamentals of the economy and guarantee growth with stability.
The Central government has set an ambitious target to reduce the fiscal deficit to 4.9 per cent of gross domestic product (GDP) in the current financial year from 5.6 per cent in 2023-24 as part of the fiscal consolidation process towards strengthening the economy.
Read also| PE Investment in India’s Real Estate Reaches $2.82 Billion in April-Dec FY25
