Income Tax Windfall: NDA Government Witnesses Over 150% Surge in Net and Gross Direct Tax Collections

The Income Tax Department, through a tweet, has highlighted the significant increase in revenue since the rule of the NDA government post-2014 compared to the fiscal year 2013-14 when the UPA government was in power. The department has observed a substantial rise in both Net Direct Tax Collection and Gross Direct Tax Collection. This surge in revenue has significantly boosted the coffers of the Income Tax Department. The increased awareness and compliance among the public have led to a nearly twofold rise in the number of individuals filing tax returns.

The term “gross direct tax collection” refers to the total amount of direct tax paid by individuals, organizations, or companies directly to the income tax department. This includes both the total amount received by the Income Tax Department as tax and any refunds due. In the fiscal year 2013-14, the income tax department collected Rs 7,21,604 crore in gross tax, while in 2022-23, this figure increased to Rs 19,72,248 crore. This represents a substantial growth of 173.31% in gross direct tax collection.

Net direct tax is the amount that remains after the Income Tax Department refunds any excess payments, including TDS (Tax Deducted at Source) and other cases. It represents the actual revenue received by the government after adjusting for refunds. In the fiscal year 2013-14, the net direct tax collection was Rs 6,38,596 crore. In comparison, for the fiscal year 2022-23, the net tax collection increased to Rs 16,63,686 crore. This signifies a substantial growth of 160.52%, indicating a significant increase in the net income tax collected by the Income Tax Department over the decade.

In simple terms, the Income Tax Return (ITR) is a form through which individuals inform the Income Tax Department of the Central Government of India about their income. It is essential to determine your income category before filing ITR. According to current regulations, individuals with an annual income exceeding Rs 2.5 lakh are required to file an income tax return.

For those engaged in employment or business, filing ITR is mandatory. Even if your income is below Rs 2.5 lakh and not taxable, it is advisable to file a return. Over the last decade, there has been a significant increase in the number of income tax returns filed. In 2013-14, 3.80 crore Indians filed returns, while in 2022-23, the number increased to 7.78 crore people. This represents a substantial growth of 104.91% in the filing of returns.

In Gujarat, the number of individual taxpayers has witnessed an 87.8 percent increase over the last five years, surpassing 1 crore income tax payers in the state. The count of Hindu Undivided Families (HUFs), firms, and companies has tripled during this period. With a population of 7 crore, Gujarat now boasts 1 crore taxpayers, indicating that one out of every seven individuals in the state files an income tax return. The Income Tax Department has been actively working to boost the taxpayer count, even using mobile messages for outreach.

The substantial threefold increase in the number of taxpayers over the last five years suggests a corresponding rise in the income levels of the people in the state. In the fiscal year 2017-18, the count of individual taxpayers was 32 lakh, which has surged to 87 lakh in 2021-22. In the same period, the number of HUFs and firms increased from 1 lakh to over 5 lakh. Corporate company taxpayers rose from 51 thousand to 1.24 lakh. Overall, one crore taxpayers contributed Rs. 70.71 thousand crore in taxes during the financial year 2022-23.

Niyati Rao

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