India's personal income tax collection has seen remarkable growth over the past decade, far outpacing corporate tax collections, according to the latest data released by the Central Board of Direct Taxes (CBDT). Between FY15 and FY24, personal income tax revenue surged by an impressive 294.3%, rising from Rs 2.65 lakh crore to Rs 10.45 lakh crore. By comparison, corporate tax collections grew by 112.85%, increasing from Rs 4.28 lakh crore to Rs 9.11 lakh crore during the same period.
This sharp rise in personal income tax revenue is credited to improved tax compliance, enhanced tax administration, and a reduction in corporate tax rates. The number of taxpayers nearly doubled over the last decade, growing from 5.70 crore in FY15 to 10.41 crore in FY24. Meanwhile, the number of tax returns filed also more than doubled, reaching 8.61 crore in FY24 compared to 4.04 crore in FY15.
India’s tax-to-GDP ratio, a crucial indicator of revenue generation relative to economic growth, improved to 6.64% in FY24 from 5.55% in FY15. Tax buoyancy, which measures the growth of tax revenue relative to GDP growth, surged to 2.12 in FY24, compared to 0.86 in FY15, indicating a strong correlation between economic growth and tax revenue collection.
Direct taxes, which include personal income tax and corporate tax, contributed significantly to the country’s overall tax revenue, accounting for 56.72% of the total tax receipts in FY24. This marks a slight increase from 56.16% a decade ago.
A large portion of India's net direct tax collections came from five key states - Maharashtra, Karnataka, Delhi, Tamil Nadu, and Gujarat. Together, these states contributed over 72% of the total Rs 19.61 lakh crore in direct tax revenue collected in FY24, amounting to Rs 14.19 lakh crore. Maharashtra led the way, contributing Rs 7.61 lakh crore, nearly one-third of the total direct tax revenue.
Additionally, eight states recorded tax collections exceeding Rs 50,000 crore in FY24, reflecting the concentration of tax revenue in a few key regions across the country.
CAclubindia
