India's personal income tax collection has seen remarkable growth over the past decade, far surpassing the pace of corporate tax collections, according to the latest data released by the Central Board of Direct Taxes (CBDT).
Personal income tax revenue surged by 294.3 per cent, rising to Rs 10.45 lakh crore in FY24, up from Rs 2.65 lakh crore in FY15. In contrast, corporate tax collections increased by a more modest 112.85 per cent during the same period, climbing from Rs 4.28 lakh crore to Rs 9.11 lakh crore.
This sharp rise in personal income tax collections can be attributed to improved compliance and tax administration, as well as a reduction in corporate tax rates over the years. The number of taxpayers nearly doubled, growing from 5.70 crore in FY15 to 10.41 crore in FY24, while the number of tax returns filed also more than doubled, reaching 8.61 crore in FY24 from 4.04 crore in FY15.
India’s tax-to-GDP ratio also saw an improvement, increasing to 6.64 per cent in FY25 from 5.55 per cent in FY15, signaling stronger revenue generation relative to the country's economic growth. Tax buoyancy, a measure of how tax revenue grows in relation to GDP growth, rose to 2.12, up from 0.86 in FY15. Direct taxes continued to play a central role in India's overall tax revenue, contributing 56.72 per cent in FY24, a slight increase from 56.16 per cent a decade earlier.
A portion of India's net direct tax collections came from just five states: Maharashtra, Karnataka, Delhi, Tamil Nadu, and Gujarat. These states together contributed over 72 per cent of the total Rs 19.61 lakh crore collected, amounting to Rs 14.19 lakh crore. Maharashtra led the pack with Rs 7.61 lakh crore, nearly one-third of the total. Additionally, eight states recorded tax collections exceeding Rs 50,000 crore, reflecting the concentration of tax revenue from a few key regions across the country.
