An astonishing growth has been witnessed in the personal income tax collection in India over the past decade, exceeding the speed of corporate tax collections, as per the updated data released by the Central Board of Direct Taxes (CBDT).
Personal income tax revenue surged by 294.3 per cent, increasing to Rs 10.45 lakh crore in FY24, up from Rs 2.65 lakh crore in FY15. Corporate tax collections increased by a more modest 112.85 per cent during the same period, rising from Rs 4.28 lakh crore to Rs 9.11 lakh crore.
The significant increase in personal income tax collections is linked to better compliance and tax administration, along with lower corporate tax rates over the years. The number of taxpayers almost doubled, increasing from 5.70 crore in FY15 to 10.41 crore in FY24, and the total number of income tax returns submitted more than doubled as well, rising to 8.61 crore in FY24 from 4.04 crore in FY15.
A rise in the tax-to-GDP ratio of India has been witnessed, increasing to 6.64 per cent in FY25 from 5.55 per cent in FY15, specifying the robust revenue generation pertinent to the economic growth of the country.
Tax buoyancy, which indicates the rate at which tax revenue increases relative to GDP growth, increased to 2.12 from 0.86 in FY15. Direct taxes remained a key component of India’s total tax revenue, making up 56.72 per cent in FY24, up from 56.16 per cent ten years ago.
from just five states a part of India’s net direct tax collections has arrived- Maharashtra, Karnataka, Delhi, Tamil Nadu, and Gujarat. Together these states contributed over 72 per cent of the total Rs 19.61 lakh crore collected, which amounts to Rs 14.19 lakh crore.
With Rs 7.61 lakh crore, Maharashtra is the leading state which accounts for nearly one-third of the total. In addition, eight states have documented tax collections that exceed Rs 50,000 crore, highlighting the concentration of tax revenue within a limited number of significant regions nationwide.
