India’s Direct Tax Collections Grow 22% To Rs 6.93 Lakh Cr

India’s net direct tax collections have witnessed an impressive growth of 22.48 per cent as of 11 August this fiscal year, reaching approximately Rs 6.93 lakh crore, according to the latest government data. 

The rise is driven by an growth in both personal income tax (PIT) and corporate tax collections, amounting to Rs 4.47 lakh crore and Rs 2.22 lakh crore, respectively. Additionally, the Securities Transaction Tax (STT) has contributed Rs 21,599 crore, while other taxes, including the equalisation levy and gift tax, brought in Rs 1,617 crore.

Refunds issued by the government between 1 April and 11 August totaled Rs 1.20 lakh crore, reflecting a 33.49 per cent increase from the previous period. 

On a gross basis, direct tax collections grew by 24 per cent to Rs 8.13 lakh crore. This includes a gross PIT collection of Rs 4.82 lakh crore and a corporate tax collection of Rs 3.08 lakh crore. The increase in personal income tax revenue stands out, with collections rising from Rs 3.91 lakh crore in the previous fiscal to Rs 4.81 lakh crore this year.

The government has set an ambitious target to collect Rs 22.07 lakh crore from direct taxes for the current fiscal year. Meanwhile, Goods and Services Tax (GST) collections have also shown strong growth, increasing by 10.3 per cent in July to exceed Rs 1.82 lakh crore. After adjusting for refunds, the net GST collection for the month stood at Rs 1.66 lakh crore, a 14.4 per cent increase. Refunds for July amounted to Rs 16,283 crore. 

The tax collection figures have sparked a debate, with Aarin Capital Chairman Mohandas Pai commenting on social media platform X (formerly Twitter) that the collections are significantly higher than budgeted. However, he criticised the Finance Ministry for not extending adequate benefits to the middle class before eventually reversing its decisions, calling the approach “very unfriendly.”