India’s direct tax collections saw a significant 16.2% growth, reaching ₹25.86 lakh crore between April 1, 2024, and March 16, 2025, compared to the same period last year, according to data from the Income Tax Department.
Breakdown of Direct Tax Collections
Direct taxes include corporate tax, personal income tax, and securities transaction tax (STT).
- Corporate Tax: Collections increased to ₹12.40 lakh crore, up from ₹10.1 lakh crore last year.
- Personal Income Tax: Revenue surged to ₹12.90 lakh crore, compared to ₹10.91 lakh crore in the previous year.
- Securities Transaction Tax (STT): Collections saw a sharp rise, reaching ₹53,095 crore, up from ₹34,131 crore last year.
- Other Taxes: Revenue from other taxes, including wealth tax, dropped slightly from ₹3,656 crore to ₹3,399 crore.
Net Tax Collections After Refunds
Tax refunds grew significantly by 32.51%, reaching ₹4.6 lakh crore. After accounting for refunds, the net direct tax collection stood at ₹21.26 lakh crore, marking a 13.13% increase from ₹18.8 lakh crore in the previous year.
Impact on the Economy
The rise in tax collections indicates a strong economic position, allowing the government to invest in infrastructure and welfare programs. It also helps control the fiscal deficit, reducing borrowing needs and leaving more funds available for corporate investment. A lower fiscal deficit also helps maintain economic stability and control inflation, contributing to long-term growth.
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