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Published: June 19, 2023
Updated: June 19, 2023

Centre's Direct Tax Collection Surges 11% to ₹3.8 Lakh Crore in FY24

The Centre's direct tax collection for the fiscal year 2023-24 has witnessed a significant increase, rising by 11% to reach ₹3.8 lakh crore. This surge in tax collections reflects positive economic activity and revenue generation. However, it is essential to examine the allocation of taxing rights and consider whether they accurately represent economic activities and value creation in market jurisdictions. Let's delve into the details of the direct tax collections and their components.

Robust Growth in Direct Tax Collections:

The Centre's direct tax collections for the fiscal year 2023-24 have shown robust growth, expanding by 11% to reach ₹3,79,760 crore. This figure demonstrates an increase compared to ₹3,41,568 crore collected in the corresponding period of the previous fiscal year. The rise in tax collections indicates a positive trend in revenue generation for the government.

Breakdown of Net Direct Tax Collection:

As of June 17, the net direct tax collection stands at ₹3,79,760 crore, encompassing corporation tax (CIT) at ₹1,56,949 crore (net of refunds) and personal income tax (PIT) including other components.

Direct Tax Collections in the Union Budget:

The Union Budget for the fiscal year 2023-24 projected a 10.5% increase in direct tax collections compared to the previous fiscal year. The actual collections, without adjusting for refunds, amounted to ₹4.19 lakh crore, reflecting a significant growth of 12.7% on a yearly basis.

Gross Collection of Direct Taxes:

The gross collection of direct taxes (before adjusting for refunds) for the fiscal year 2023-24 stands at ₹4,19,338 crore. This represents an increase from ₹3,71,982 crore collected in the corresponding period of the previous financial year. The gross collection comprises corporation tax (CIT) at ₹1,87,311 crore and personal income tax (PIT) including securities transaction tax (STT) at ₹2,31,391 crore.

Components of Minor Head Wise Collection:

The minor head wise collection of direct taxes includes advance tax, tax deducted at source (TDS), self-assessment tax, regular assessment tax, and tax under other minor heads. Advance tax collections for the first quarter of the fiscal year 2023-24 rose by 13.7% to reach ₹1,16,776 crore.

Rise in Refunds:

Refunds issued during the fiscal year 2023-24 till June 17, 2023, have seen a substantial increase of 30.13% year-on-year, reaching ₹39,578 crore. This compares to refunds amounting to ₹30,414 crore issued during the corresponding period in the previous fiscal year.

The Centre's direct tax collection for the fiscal year 2023-24 has exhibited a notable growth of 11%. This positive trend in tax revenue reflects a healthy economic environment. However, it is crucial to critically analyse the allocation of taxing rights to ensure they accurately reflect economic activities and value creation in respective market jurisdictions. The rise in refunds and various components of direct tax collections further contribute to the overall assessment of the fiscal landscape.