Net direct tax collections exceed 2023-24 target

Last Updated23/04/2024

India’s net direct tax collections grew 17.7% in 2023-24 to hit ₹19.58 lakh crore Marginally surpassing the revised estimates for the year.
Surge in personal income taxes whose share of the tax kitty rose to 53.3% from 50.06%
However, the corporate taxes’ contribution dipped to 46.5% from 49.6%.

A direct tax is a tax that a person or organization pays directly to the imposing Government.
There are various types of Direct Taxes like Income Tax, Property Tax etc., however the important Direct taxes are:
Income Tax: Income tax is levied on one’s earnings in a financial year from 1 April and 31 March. Tax slabs are the brackets that determine the tax to be paid based on the annual income.
Corporate Tax: Imposed on net income of a company registered in India under the Companies Act 1956. It is also an income tax, due to its large contribution to the income tax, it is shown in a separate head.
Minimum Alternate Tax: Aimed at bringing those companies under tax net which try to escape corporate tax or pay very low tax by using provisions of the tax laws.
Equalization Levy: It was introduced in the Finance Act, 2016 as a measure of tax evasion. It is levied on foreign companies over cross-border digital transactions
Security Transaction Tax (STT): It is a direct tax charged on purchase and sale of securities that are listed on the recognized stock exchanges in India.

Equity: Direct taxes like income tax, wealth tax, etc. are based on the principle of ability to pay.
Progressive: Usually direct taxation is progressive in effect, taxes increase with rise in Income.
Productive: Direct taxes are elastic and productive. Revenue from direct taxes increases or decreases automatically with the change in the national income or wealth of the country.

Concessional Rates: For Personal Income Tax - The Finance Act, 2020 has provided an option to individuals and cooperatives to pay income tax at concessional rates.
Vivad se Vishwas Scheme: Under Vivad se Vishwas, declarations for settling pending tax disputes are currently being filed.
Transparent Taxation platform: It is aimed at bringing transparency in income tax systems and empowering taxpayers.