Tax collection on course to grow 3 times to over Rs.19 lakh crore in 10 years of Modi Government

Personal income and corporate tax collections are likely to rise to more than Rs.19 lakh crore in 10 years of Prime Minister Narendra Modi-led Government, providing more leeway to come out with people-friendly tax measures.

Driven by the increasing income of individuals, net direct tax collections after adjusting for refunds increased from Rs.6.38 lakh crore in FY 2013-14 to Rs.16.61 lakh crore in FY 2022-23.

In the current financial year, the collections from net direct taxes — personal income tax and corporate tax — have so far grown by 20% and at this pace, the mop-up is likely to be around Rs.19 lakh crore in the fiscal ending on March 31, 2024.

The projected amount will exceed the estimate of Rs.18.23 lakh crore in the 2023-24 Budget.

Over the years, the Government has been trying to make the tax regime simpler with lower rates and fewer exemptions. In 2019, the Government offered a lower rate of tax for corporate’s who forego exemptions. Similar scheme was introduced for individuals in April 2020.

The new income tax regime for individuals was made more attractive in the 2023-24 Budget by rationalising the tax slabs, raising basic exemption limit to Rs.3 lakh and including standard deduction of ₹50,000. It has also been made the default tax regime in the income tax return form.

Read more at: The Hindu