India’s direct tax collections set to exceed budget target for 2024-25

Direct tax collections likely to exceed Budget target of Rs.22 lakh crore

India’s direct tax collections are on track to surpass the target set in the Union Budget for the current financial year, according to Ravi Agarwal, Chairman of the Central Board of Direct Taxes (CBDT). The government had aimed for Rs.22.07 lakh crore in direct tax receipts, and Agarwal’s remarks suggest the country is poised to exceed this goal for the second consecutive year, reflecting a robust fiscal position and strong economic growth.

As of November 10, the Income Tax Department reported a significant rise in collections, with net direct tax receipts—comprising corporate tax and personal income tax—climbing 15.4% year-on-year to reach Rs.12.1 lakh crore. On a gross basis, direct taxes surged by over 21% to Rs.15 lakh crore during the same period.

The figures are indicative of a continued upward trend in India’s tax revenues. The government also issued Rs.2.9 lakh crore in tax refunds, marking a 53% increase compared to the same period last year.

The target for direct tax collections in the 2024-25 financial year is broken down into Rs.10.20 lakh crore from corporate taxes and Rs.11.87 lakh crore from personal income tax, non-corporate taxes, and other related levies. If current trends continue, these targets are likely to be surpassed by year-end.

Last year, direct tax collections for 2023-24 also exceeded the budget estimate by a significant margin. The net collections for that year amounted to Rs.19.58 lakh crore, up 17.7% from the previous year, surpassing the original budget estimate of Rs.18.23 lakh crore and the revised estimate of Rs.19.45 lakh crore. The total exceeded the budgeted figures by Rs 1.35 lakh crore, reflecting the country’s continued fiscal health driven by economic expansion.

Agarwal’s comments underscore the strong performance of India’s tax system, which continues to benefit from economic growth and an expanding formal economy. The uptick in corporate and non-corporate tax receipts points to a broad-based recovery, with businesses and individuals contributing more to the national revenue base.

As India moves through the current fiscal year, analysts are optimistic that these collections will help strengthen the government’s financial position and provide more room for public investment and welfare initiatives.

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