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Context: The current status of India's net direct tax collections, indicates significant growth and meeting a substantial portion of the targeted amount for the fiscal year 2023-24.

Key Highlights

Current Net Direct Tax Collections

• India's net direct tax collections reached ₹14.7 lakh crore by January 10.
• This amount represents over four-fifths (80.61%) of the total budget estimates for direct taxes for the fiscal year 2023-24.

Growth and Performance

• The net direct tax kitty has grown by ₹1 lakh crore since December 17, when it had already crossed ₹13.7 lakh crore.
• This reflects a growth of 19.4% over the same period in the previous fiscal year (2022-23).

Composition of Collections

• Gross collections rose by 16.77% to ₹17.18 lakh crore.
• Personal Income Tax (PIT) inflows saw a significant increase of 26.11%, while Corporate Income Tax (CIT) collections grew at a relatively muted pace of 8.32%.

Refunds and Adjustments

• Refunds amounting to ₹2.48 lakh crore had been issued to taxpayers by the specified period.
• Net of refunds, the growth in CIT collections was 12.37%, and in PIT collections, it was 27.26% (PIT only). Net of refunds, PIT and Securities Transaction Tax receipts were up 27.22%.

Future Projections

• The Central Board of Direct Taxes expressed that provisional direct tax collections continue to register steady growth.
• Rating agency ICRA anticipates that the full year's direct tax collections will exceed Budget estimates by ₹1 lakh crore, with a projected growth of around 18% over the provisional numbers for 2022-23.

2024-25 Projections

• ICRA projects a 12% growth in direct tax revenues for the fiscal year 2024-25, based on expectations of favourable commodity prices on corporate profitability and government efforts to improve compliance.

Conclusion

• The data suggests a positive trend in India's direct tax collections, with substantial progress towards meeting the fiscal targets for the current year and optimistic projections for the upcoming fiscal year.

Must Read Articles:

Direct Tax Collections: https://www.iasgyan.in/daily-current-affairs/direct-tax-collections#:~:text=Direct%20taxes%2C%20usually%20levied%20on,income%20tax%20and%20wealth%20tax.

DIRECT TAXES: https://www.iasgyan.in/daily-current-affairs/direct-taxes-36

PRACTICE QUESTION Q. What are the key components influencing the trends in direct tax collection in India, and how has the government adapted its policies and strategies to enhance revenue generation through direct taxes?