Net Direct Tax Collections up by more than 160% in last 10 years: Govt data

Net Direct Tax Collections within ten years have increased by 160.17 per cent from Rs 6,38,596 crore in F.Y. 2013-14 to Rs 16,61,428 crore (provisional) in F.Y. 2022-23, shows the recent data released by the Central Board of Direct Taxes (CBDT). The data also reveals that Gross Direct Tax Collections have increased by over 172.83 per cent in F.Y. 2022-23, reaching a figure of Rs 19,68,780 crore (provisional) from Gross Direct Tax Collections of Rs 7,21,604 crore in F.Y. 2013-14.

“The reasons could be widening of tax base, use of technology (such as AIS) to bring in more income into the tax belt, etc. There has been an increase in the share of total shareable tax revenue coupled with overall growth in tax revenue has caused this spike,” Niranjana Manickam, Chartered Accountant, said.  

According to sources from the Finance Ministry, the adoption of digital initiatives aimed at simplifying compliance has also contributed to better tax collection. 

“In addition, the tax base has expanded significantly over the past five years. For example, the number of income tax return filers has increased from 2.26 crores in FY 2015-16 to more than 5.83 crores in FY 2021-22. Tax departments (both CBDT and CBIC) use sophisticated data analysis tools to detect tax evasion,” mentioned sources from the revenue department.  

The recent data released by the Ministry also revealed that the direct-tax-to-GDP ratio has increased from 5.62 per cent in F.Y. 2013-14 to 5.97 per cent in F.Y. 2021-22 and the cost of collection has decreased from 0.57 per cent of total collection in the F.Y. 2013-14 to 0.53 per cent of total collection in the F.Y. 2021-22. 

Due to the rising industrial hubs and IT sectors, Bengaluru is likely to surpass Delhi and become the second-highest contributor in the country’s direct tax collection, as per an internal analysis of the Income-Tax Department. Mumbai, however, remained at the top position. 

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