According to provisional Direct Tax Collections data for the Financial Year 2023–24 (as of November 09, 2023), net collections are at Rs. 10.60 lakh crore which is 21.82 percent higher than the net collections for the corresponding period last year. This collection is 58 percent of the total Budget Estimates of Direct Taxes for F.Y. 2023-24. As on November 09, 2023, the Net Direct Tax revenues were Rs. 10.60 lakh crore, while the gross collection was at Rs 12.37 lakh crore, which is 17.59 percent higher than the gross collections for the same period last year.
In terms of gross revenue collections, the growth rates for Corporate Income Tax (CIT) and Personal Income Tax (PIT) are as follows: CIT is 12.48 percent, while PIT is 31.77 percent (PIT only)/29.08 percent (PIT plus STT). The net growth in CIT collections after refund adjustments is 12.48 percent, while the net growth in PIT collections is 31.77 percent (PIT only)/31.26 percent (PIT plus STT). Refunds amounting to Rs. 1.77 lakh crore have been issued during April 1, 2023 to November 9, 2023.
The monthly Goods and Service Tax (GST) revenues recently exceeded the mark of Rs. 1.4 lakh crore for the 20th straight month in a row as GST revenues were recorded at Rs 1.72 lakh crore in October 2023, the Finance Ministry said. The gross GST revenue collected in the month of October 2023 was Rs 1,72,003 crore of which Central Goods and Service Tax (CGST) was Rs 30,062 crore, State Goods and Service Tax (SGST) was Rs 38,171 crore, Integrated Goods and Service Tax (IGST) was Rs 91,315 crore. (Including Rs 42,127 crore collected on import of goods) and cess is Rs 12,456 crore (including Rs 1,294 crore collected on import of goods).
Rohinton Sidhwa, partner, Deloitte India said, “While personal income tax collections are registering over a 30 percent growth, corporate income tax collections still need to pick up. A clearer picture should emerge once the filing season concludes at the end of November.”
Source: Reserve Bank of India
*Up to November 09, 2023
As per the Ministry, Net Direct Tax Collections have increased by 121.18 percent from Rs. 6,38,596 crore in FY2013-14 to Rs. 14,12,422 crore in FY2021-22. Talking about the Gross Direct Tax Collections, it increased by over 126.73 percent in FY2021-22 reaching a figure of Rs. 16,36,081 crore from Gross Direct Tax Collections of Rs. 7,21,604 crore in FY2013-14.
As of June 17, 2023, the Advance Tax collections for the first quarter of the FY 2023–24 were Rs 1,16,776 crore, up 13.70 percent from the Advance Tax revenues of Rs 1,02,707 crore for the same period of the Financial Year that was immediately prior. Corporation Tax (CIT) at Rs 92,784 crore and Personal Income Tax (PIT) at Rs 23,991 crore make up the Advance Tax Collection of Rs 1,16,776 crore as on June 17, 2023.
The central government’s direct tax collection has increased more than four times in last 12 years. The direct tax collection in the FY2010-11 was Rs 4,45,994 crore this increased to Rs 8,49,713 crore in FY2016-17 and now it has further increased to Rs 16,61,000 crore in FY2022-23. The direct tax collection for the FY2022-23 is record high till date.
A direct tax is one that is paid by an individual or group of individuals directly to the body that levied it. For instance, an individual taxpayer may pay direct taxes to the government for a variety of reasons, such as income tax, real estate tax, personal property tax, or asset taxes. According to the sources from revenue department, the reasons for high tax collection are adoption of digital initiatives aimed at simplifying compliance and expansion of the tax base in recent years
According to the time series data provided by the Central Board of Direct Taxes (CBDT), direct tax buoyancy, a measure of growth in the collection of personal income tax and corporation tax versus the growth in GDP rose to 2.52 in FY22, the highest level in the previous 15 years. A higher buoyancy indicates more effective tax collection. The highest buoyancy, 2.59, was observed in FY03, while it became negative (-1.21) in FY20. The CBDT highlighted the data for 22 years beginning in 2000–21. Tax buoyancy was not calculated for FY21 because both GDP and tax growth were negative. So buoyancy increased in FY22, most likely as a result of a low base effect.
One of the concerns was the prediction of a drop in direct tax collection in FY2023-24. The fiscal year 2022-23 had seen a record increase in net direct taxes, which are made up of personal income tax and the tax on corporate profits, exceeding the figures forecast in the Budget.
Devendra Kumar Pant, chief economist, India Ratings & Research said, “The Centre aims to narrow the fiscal deficit—the difference between its income and spending—to 5.9% of gross domestic product in FY24. Buoyant direct tax collections will help the government meet its fiscal deficit target, which is crucial as it may not meet its divestment target and incur additional expenditure in the form of fertilizer subsidy, cooking gas subsidy and MNREGA ahead of the general elections slated next year.”