India’s net direct tax collections have jumped 15.88% to Rs 16.90 lakh crore during the period of April 1, 2024 to January 12, 2025, compared to the same period in the previous financial year, according to the latest data from the Income Tax Department.
Gross direct tax collections, before refunds, rose by 19.94%, reaching Rs 20.64 lakh crore, up from Rs 17.21 lakh crore in the corresponding period of the previous year.
Personal income tax collections surged by 21.6%, totaling Rs 8.74 lakh crore compared to Rs 7.2 lakh crore in the previous year. Corporate tax collections saw an increase of 8.12%, rising to Rs 7.7 lakh crore from Rs 7.10 lakh crore in the same period of 2023-24.
The collection from Securities Transaction Tax (STT), a part of direct taxes, skyrocketed by 75% to Rs 44,500 crore compared to Rs 25,415 crore during the same period last year.
Refunds issued amounted to Rs 3.74 lakh crore, marking a 42.5% year-on-year increase. The robust growth in tax collections reflects India’s strong macroeconomic position. It enables the government to fund large infrastructure projects and welfare schemes, driving economic growth.
Fiscal Deficit And Economic Growth:
The healthy tax revenues help maintain the fiscal deficit under control. A lower fiscal deficit reduces the government’s borrowing needs, which leaves more liquidity in the banking system for corporate investment. This, in turn, promotes job creation and accelerates economic growth.
A lower fiscal deficit also helps manage inflation, providing stability to the economy and fostering sustained growth. The government aims to reduce the fiscal deficit to 4.9% of GDP in the current fiscal year, down from 5.6% in 2023-24, as part of its fiscal consolidation efforts to strengthen the economy.
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