India’s Direct Tax Collections Show Robust Growth in FY 2024-25

India’s Ministry of Finance has released provisional figures for direct tax collections in the first quarter of the current financial year (FY) 2024-25, painting a positive picture of the country’s economic performance. Both net and gross collections have witnessed significant growth compared to the corresponding period in FY 2023-24.

Net Collections Surge Over 20%

Net direct tax collections, which account for the final amount collected after adjusting for refunds, stand at ₹4,62,664 crore as of June 17th, 2024. This represents a substantial increase of 20.99% compared to ₹3,82,414 crore collected in the same period of the previous fiscal year. This growth is driven by both Corporation Tax (CIT) and Personal Income Tax (PIT), including Securities Transaction Tax (STT).

Strong Performance Across Tax Categories

The positive trend extends to gross collections, representing the total amount collected before refunds are issued. Gross direct tax collections have climbed to Rs. 5,15,986 crore, reflecting a growth of 22.19% over the ₹4,22,295 crore collected during the same period last year. A breakdown of this figure reveals healthy contributions from both CIT and PIT, including STT.

Advance Tax Collections Witness Significant Jump

A key indicator of economic activity, advance tax collections, which represent taxes paid in instalments throughout the year, have also shown impressive growth. As of June 17th, 2024, advance tax collections have reached ₹1,48,823 crore, representing a significant increase of 27.34% compared to ₹1,16,875 crore collected in the corresponding period of the previous year. This growth suggests continued economic buoyancy and positive business sentiment.

Refunds Remain Manageable

While collections are rising, it’s important to note that the government has also issued refunds amounting to ₹53,322 crore in the current fiscal year till June 17th. This represents a 33.70% increase compared to refunds issued during the same period last year. This rise in refunds indicates the government’s commitment to processing tax claims efficiently while maintaining a healthy balance between revenue collection and taxpayer satisfaction.

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