Modi Government Tax Collection Set to Triple, Surpassing Rs 19 Lakh Crore in a Decade

Modi Government Tax Collection Set to Triple, Surpassing Rs 19 Lakh Crore in a Decade

Asif Iqbal | December 29, 2023 | 12:07 PM IST | India, Politics | Follow on Google News

Modi Government Tax Collection Set to Triple, Surpassing Rs 19 Lakh Crore in a Decade.image/agencies

Modi Government Tax Collection Set to Triple, Surpassing Rs 19 Lakh Crore in a Decade

Over the course of the ten-year tenure of the Narendra Modi-led government, there is a projected surge in personal income and corporate tax collections, likely surpassing Rs 19 lakh crore. This substantial increase, attributed to the rising income of individuals, has seen net direct tax collections grow from Rs 6.38 lakh crore in FY 2013-14 to Rs 16.61 lakh crore in FY 2022-23, adjusted for refunds.

In the ongoing fiscal year, net direct tax collections, encompassing personal income tax and corporate tax, have experienced a noteworthy 20% growth. At this pace, the total collections are anticipated to reach around Rs 19 lakh crore by the end of the fiscal year on March 31, 2024, exceeding the estimated amount of Rs 18.23 lakh crore in the 2023-24 Budget.

Over the years, the government has aimed to simplify the tax regime, introducing lower rates and reducing exemptions. In the 2023-24 Budget, the new income tax regime for individuals was enhanced by rationalizing tax slabs, elevating the basic exemption limit to Rs 3 lakh, and incorporating a standard deduction of Rs 50,000. This revamped regime has become the default option in the income tax return form.

However, certain proposals faced resistance during the year, such as the attempt to include credit card spending in foreign currency under the RBI’s Liberalised Remittance Scheme’s annual limit of USD 2.50 lakh per person. This move, which would have implicated Tax Collected at Source (TCS), encountered compliance issues, leading to the deferment of its implementation.

Notably, there has been a substantial increase in the number of Income Tax Returns (ITRs) filed by individual taxpayers, from 3.36 crore in 2013-14 to 6.37 crore in 2021-22, marking a 90% overall increase. As of October 26, 2023, 7.41 crore returns have been filed in the current fiscal year, including 53 lakh returns by first-time filers.

Looking ahead, with direct tax collections growing at approximately 20% in the current fiscal year and GST collections consistently reaching new peaks, the trend is expected to persist in 2024, buoyed by a robust economic performance. The Goods and Services Tax (GST) collection in April 2023 reached a record high of Rs 1.87 lakh crore, with an average gross monthly collection of Rs 1.66 lakh crore in 2023-24, reflecting an 11% increase compared to the same period in the previous financial year.

The upcoming Budget, to be presented in July 2024 by the new government after the general elections in April-May, is anticipated to focus on initiatives to attract investments and innovation, aligning with the China+1 strategy, and ongoing efforts to improve the World Bank B-READY ranking.

In conclusion, the positive trajectory of tax collections, coupled with the government’s emphasis on digitalization and formalization of the economy, provides room for potential tax rate rationalization. Stakeholders anticipate continued efforts to streamline direct tax provisions for enhanced tax certainty in the coming years.

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Asif Iqbal

Asif Iqbal is a seasoned news writer with a passion for delivering the latest updates to the public. Currently serving as the senior writer at VoM News, a prominent news outlet known for its comprehensive coverage of diverse topics, Asif has established himself as a reliable source of information. With a keen eye for detail and a knack for storytelling, he consistently provides readers with well-crafted articles that cover a wide range of news categories. His dedication to journalistic integrity and his commitment to staying ahead of the news curve make him an invaluable asset to Vom News, ensuring that readers are always well-informed on the issues that matter most. You can find his work and stay updated on current events by visiting vomnews.in.