Winning Bizness Desk

Mumbai. The Indian government has reported a collection of Rs 11.25 lakh crore in net direct taxes for the period from April 1 to October 10, 2024. This represents an 18.35% increase compared to the Rs 9.51 lakh crore collected during the same period in 2023. Of the total, Rs 4.94 lakh crore came from corporate taxes, while Rs 5.98 lakh crore was contributed by personal income tax. The government's efficient tax collection strategies, coupled with a recovering economy, have been key drivers of this increase, reflecting growing economic activity and higher profitability across sectors. Tax collection is an essential indicator of economic strength, with the rise in both corporate and personal income taxes demonstrating resilience in the Indian economy. Notably, the government will continue monitoring both direct and indirect tax collections closely as they are critical indicators of fiscal health and economic activity.

Refunds Also Surge by 46%

In addition to the increased tax collection, the Income Tax Department has issued refunds amounting to Rs 2.31 lakh crore in this period, a significant 46% rise compared to the Rs 1.58 lakh crore refunded by October 10, 2023. The government is focused on enhancing taxpayer confidence by improving refund processing times. The government has set a target of collecting Rs 22.07 lakh crore in direct taxes for the 2024-25 financial year, and the current collection figures suggest the government is on track to meet this target.

Direct vs. Indirect Taxes

Direct taxes, such as corporate and personal income taxes, are collected directly from individuals and corporations based on their earnings. These taxes are a critical source of revenue for the government and provide an insight into economic activities. In contrast, indirect taxes, such as Goods and Services Tax (GST), excise duty, and customs duty, are imposed on goods and services and are passed on to consumers. The government’s ability to collect direct taxes efficiently has been vital in supporting its fiscal initiatives.

GST Collections Remain Steady

In a related development, the government collected Rs 1.73 lakh crore in GST for September 2024, marking a 6.5% year-on-year increase from the Rs 1.62 lakh crore collected in September 2023. However, the pace of GST growth has slowed to single digits for the second consecutive month. In the second quarter of FY 2025, the average monthly GST collection was Rs 1.77 lakh crore, compared to Rs 1.86 lakh crore in the first quarter. Despite the slowing growth in GST collections, the steady increase in direct tax revenues shows that the Indian economy continues to expand and recover, driven by improved business conditions and stronger consumer demand.