Winning Bizness Desk

Mumbai. The Finance Ministry has reported a significant increase in direct tax collections for the financial year 2024-25, reflecting robust economic activity and improved tax compliance. As of August 11, 2024, the gross direct tax collection has surged by 23.99%, reaching ₹8,13,170 crore. After accounting for refunds, the net direct tax collection stands at ₹6,92,987 crore, marking a 22.48% increase compared to the previous fiscal year. According to the experts, this trend of rising tax collections is expected to continue, driven by ongoing reforms, improved compliance, and sustained economic growth.

Detailed Breakdown of Tax Collections

According to the data released by the ministry, the gross tax collection in the current financial year comprises several components:

Corporate Tax: ₹3,08,061 crore

Personal Income Tax: ₹4,81,876 crore

Securities Transaction Tax (STT): ₹21,599 crore

Other Taxes: ₹1,634 crore, including Fringe Benefit Tax, Wealth Tax, Banking Cash Transaction Tax, Hotel Receipt Tax, Interest Tax, Expenditure Tax, Estate Duty, and Gift Tax.

The figures indicate a strong performance across different tax categories. Corporate tax collections have increased by approximately 22%, reflecting the continued profitability of Indian businesses. Meanwhile, personal income tax collections have seen a 23.04% rise compared to the same period in the previous financial year, highlighting increased individual earnings and improved tax compliance.

Significant Growth in Securities Transaction Tax

One of the standout figures in the report is the 111% increase in Securities Transaction Tax (STT) collections, which indicates a substantial surge in stock market trading activity. This spike in STT collections corresponds with the recent record highs observed in the stock market, driven by heightened investor participation and increased trading volumes.

Refunds and Net Collections

During this period, the government issued refunds amounting to ₹1,20,183 crore, which reduced the gross collection to a net figure of ₹6,92,987 crore. This represents a significant improvement over the net collection of ₹5,65,815 crore recorded during the same period in the previous fiscal year (2023-24), when the gross collection was ₹6,55,843 crore, and refunds totaled ₹90,028 crore.

Economic Implications

The sharp rise in direct tax collections underscores the resilience of India's economy amidst global uncertainties and reflects the government's efforts to widen the tax base and enhance compliance. The growth in tax revenues will likely provide the government with additional fiscal space to fund its various development and welfare initiatives, further supporting economic growth.