India's Tax Collection Grows by 8% Despite Income Tax Exemption Increase

Despite the government increasing income tax exemptions, the number of taxpayers in the country has increased by 50% in the last 4 years. In the previous budget, the government raised the income tax exemption limit to 12 lakh, which led to speculation that the government’s revenue would decrease. However, data released on January 2 clearly shows that giving tax exemptions has not had any adverse impact. The Income Tax Department has released tax collection figures from April to date, which shows an 8% increase in tax collections.

The direct tax collection, which is the tax directly levied on the income of individuals and companies, grew by 8%. According to the Income Tax Department, the net direct tax collection between April 1 and December 17 has exceeded ₹17.04 lakh crore, reflecting an 8% growth. The growth has been attributed to slower refunds and higher advance taxes paid by companies.

Among the details provided, corporate tax collections rose by 10.54% to ₹8.17 lakh crore, while non-corporate tax (which includes taxes paid by individuals, Hindu Undivided Families (HUFs), and other entities) grew by 6.37% to ₹8.47 lakh crore.