India's Net Direct Tax Collections Increase by 16% to Rs 16.90 Lakh Crore in FY25
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Synopsis
India’s net direct tax collections surged by 15.88% to Rs 16.90 lakh crore from April 1, 2024, to January 12, 2025. The government reported significant growth in both personal and corporate tax collections, indicating a strong economic position.
Key Takeaways
- Net direct tax collections up by 15.88%.
- Gross direct tax collections rose 19.94%.
- Personal income tax grew by 21.6%.
- Corporate tax increased by 8.12%.
- STT collections soared by 75%.
New Delhi, Jan 14 (NationPress) India’s net direct tax collections experienced a remarkable 15.88 percent increase, reaching Rs 16.90 lakh crore from April 1, 2024, to January 12, 2025, compared to the previous financial year. These figures were released by the Income Tax Department.
The gross direct tax collections, before refunds, surged by 19.94 percent to Rs 20.64 lakh crore during this timeframe, compared to Rs 17.21 lakh crore last year.
Collections from personal income tax rose 21.6 percent to Rs 8.74 lakh crore, up from Rs 7.2 lakh crore in the previous year, while corporate tax collections saw an increase of 8.12 percent to Rs 7.7 lakh crore compared to Rs 7.10 lakh crore in the same period of 2023-24.
The Securities Transaction Tax (STT) collection, a component of direct tax, skyrocketed by 75 percent to Rs 44,500 crore compared to Rs 25,415 crore in the same timeframe last year.
Refunds issued during this period amounted to Rs 3.74 lakh crore, reflecting an increase of 42.5 percent year-on-year.
This surge in tax collections indicates a solid macroeconomic position, allowing the government to gather more resources for significant infrastructure investments aimed at fostering economic growth and implementing welfare programs for the underprivileged.
Additionally, it aids in maintaining a controlled fiscal deficit. A smaller fiscal deficit translates to reduced government borrowing, which in turn means more capital is available in the banking sector for major corporations to borrow and invest. This cycle encourages a higher economic growth rate and generates additional employment.
Moreover, a reduced fiscal deficit helps to stabilize inflation rates, thereby strengthening the economy's fundamentals and ensuring growth alongside stability.
The government is targeting a reduction of the fiscal deficit to 4.9 percent of gross domestic product (GDP) for this financial year, down from 5.6 percent in 2023-24, as part of its fiscal consolidation strategy to fortify the economy.
