{"id":103591,"date":"2024-04-22T19:45:27","date_gmt":"2024-04-22T14:15:27","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=current-affairs&#038;p=103591"},"modified":"2024-04-23T17:26:53","modified_gmt":"2024-04-23T11:56:53","slug":"increase-in-indias-direct-tax","status":"publish","type":"current-affairs","link":"https:\/\/pwonlyias.com\/stage\/current-affairs\/increase-in-indias-direct-tax","title":{"rendered":"Increase in India\u2019s Direct Tax Collections"},"content":{"rendered":"<h2><span style=\"font-size: 18pt;\"><strong>Context<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The net <\/span><b>direct tax collections<\/b><span style=\"font-weight: 400;\"> for the <\/span><b>fiscal year 2023-24<\/b><span style=\"font-weight: 400;\"> reached <\/span><b>\u20b919.58 trillion<\/b><span style=\"font-weight: 400;\">, marking a <\/span><b>17.7% increase<\/b><span style=\"font-weight: 400;\"> from the<\/span><b> previous fiscal year 2022-23.\u00a0<\/b><\/p>\n<h2><span style=\"font-size: 18pt;\"><strong>Direct Tax Collections in FY23-24<\/strong><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-103684 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125426248-1-6627688622f51.webp\" alt=\"Direct Tax\" width=\"428\" height=\"344\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125426248-1-6627688622f51.webp 1194w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125426248-1-6627688622f51-300x241.webp 300w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125426248-1-6627688622f51-1024x823.webp 1024w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125426248-1-6627688622f51-768x617.webp 768w\" sizes=\"(max-width: 428px) 100vw, 428px\" \/><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Exceeding Budget Estimates: <\/b><span style=\"font-weight: 400;\">This figure surpassed the initial budget estimate by<\/span><b> \u20b91.35 trillion<\/b><span style=\"font-weight: 400;\"> and the revised estimate (RE) mentioned in the interim budget by \u20b913,000 crore.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">If refunds are added to the collection, the resultant <\/span><b>gross direct tax collection<\/b><span style=\"font-weight: 400;\"> grew <\/span><b>18.5 per cent to Rs 23.37 trillion<\/b><span style=\"font-weight: 400;\"> during FY24 from Rs 19.72 trillion during FY23.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Refunds of Rs 3.79 trillion were issued during 2023-24, showing an <\/span><b>increase of 22.7 per cent over Rs 3.09 trillion issued the previous year.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Rise in Personal Income Tax Collection:<\/b><span style=\"font-weight: 400;\"> In FY24, the actual growth in personal income tax collection exceeded expectations, reaching <\/span><b>25.3% compared to the 22.7% projected in the Revised Estimates (RE) <\/b><span style=\"font-weight: 400;\">over the FY23 collection.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance of Increased<\/b> <b>Income Tax Collections: Net income tax collections <\/b><span style=\"font-weight: 400;\">surged by 25.2%. This is significant for two reasons:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The higher tax payments suggest increased earnings, indicating prosperity among taxpayers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It may indicate an expansion of the tax base.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lower than Anticipated Corporation Tax Growth: <\/b><span style=\"font-weight: 400;\">The growth in corporation tax was <\/span><b>lower than anticipated, standing at 10.3%<\/b><span style=\"font-weight: 400;\"> instead of the 11.7% forecasted in the RE.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The government <\/span><b>reduced the corporation tax rate to 22%<\/b><span style=\"font-weight: 400;\"> (25.17% including cess and surcharge) from the <\/span><b>previous 30% <\/b><span style=\"font-weight: 400;\">starting from FY20 for companies that do not utilize any exemptions or incentives.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The tax rate was <\/span><b>lowered to 15% for newly established domestic companies<\/b><span style=\"font-weight: 400;\"> incorporated on or after October 1, 2019, engaged in fresh investments in manufacturing until March 31, 2023.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">This deadline was subsequently extended until March 31, 2024.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Trend in Indirect Tax Collection: <\/b><span style=\"font-weight: 400;\">As <\/span><b>indirect tax collection exceeded the RE <\/b><span style=\"font-weight: 400;\">for FY24, it is anticipated that the<\/span><b> total tax revenue will surpass the RE.\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The <\/span><b>indirect tax collection for FY24 surpassed the RE of Rs 14.84 trillion<\/b><span style=\"font-weight: 400;\"> by a considerable margin, primarily due to record GST collection.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span class=\"vc_button\"><a href=\"https:\/\/www.pw.live\/batches\/upsc?utm_source=seo+upsc+batch&#038;utm_medium=seo+upsc&#038;utm_campaign=seo&#038;utm_id=upsc\" target=\"_blank\" rel=\"noopener\">Enroll now for UPSC Online Course<\/a><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-103686 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125421611-1-662768842982a.webp\" alt=\"Direct Tax\" width=\"396\" height=\"252\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125421611-1-662768842982a.webp 1144w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125421611-1-662768842982a-300x191.webp 300w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125421611-1-662768842982a-1024x652.webp 1024w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125421611-1-662768842982a-768x489.webp 768w\" sizes=\"(max-width: 396px) 100vw, 396px\" \/><\/p>\n<h2><span style=\"font-size: 18pt;\"><strong>About Direct Tax<\/strong><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>About: <\/b><span style=\"font-weight: 400;\">It is a type of tax that is <\/span><b>levied directly on the income, wealth, or property of individuals or organizations.\u00a0<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Unlike indirect taxes, which are levied on goods and services and are paid indirectly by consumers (such as sales tax or VAT), <\/span><b>direct taxes are paid directly to the government by the taxpayer.\u00a0<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance:\u00a0 <\/b><span style=\"font-weight: 400;\">The tax rate <\/span><b>increases as income or wealth increases w<\/b><span style=\"font-weight: 400;\">hich promotes a sense of<\/span><b> fair distribution of the tax burden<\/b><span style=\"font-weight: 400;\"> based on ability to pay.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Income Tax:<\/b><span style=\"font-weight: 400;\">\u00a0 Imposed on individual, liable to pay the tax directly to the Government and bear the burden of the tax himself.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Corporation\u00a0 Tax:<\/b><span style=\"font-weight: 400;\"> Levied on the profit of corporations and companies.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><strong>Government Initiatives to Improve Direct Taxes<\/strong><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Faceless E-assessment Scheme (2019) &#038; Faceless Appeals(2020):\u00a0 <\/b><span style=\"font-weight: 400;\">It <\/span><b>removes direct interaction between taxpayers and assessing officers\/ appellate authorities<\/b><span style=\"font-weight: 400;\"> fostering transparency and reducing bias.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Document Identification Number (DIN): <\/b><span style=\"font-weight: 400;\">\u00a0A <\/span><b>unique DIN is assigned to every communication<\/b><span style=\"font-weight: 400;\"> related to tax matters, facilitating<\/span><b> easy tracking and verification.<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Advance Pricing Agreements (APAs): <\/b><span style=\"font-weight: 400;\">It allows taxpayers and tax authorities to <\/span><b>pre-agree on how to price international transactions,<\/b><span style=\"font-weight: 400;\"> minimizing future disputes and fostering certainty.<\/span><\/li>\n<li><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-103687 alignright\" src=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125416035-1-66276883e84d3.webp\" alt=\"Direct Tax\" width=\"402\" height=\"268\" srcset=\"https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125416035-1-66276883e84d3.webp 1108w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125416035-1-66276883e84d3-300x200.webp 300w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125416035-1-66276883e84d3-1024x684.webp 1024w, https:\/\/pwonlyias.com\/stage\/wp-content\/uploads\/2024\/04\/untitled-2024-04-23t125416035-1-66276883e84d3-768x513.webp 768w\" sizes=\"(max-width: 402px) 100vw, 402px\" \/><b>Vivad se Vishwas Act, 2020: <\/b><span style=\"font-weight: 400;\">It provides a <\/span><b>window for settling pending direct tax disputes<\/b><span style=\"font-weight: 400;\">, offering <\/span><b>reduced penalties and fees for timely resolution.\u00a0<\/b><\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><strong>About Indirect Tax<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">It is the tax levied on the consumption of goods and services. It is<\/span><b> not directly levied on the income of a person.\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Indirect tax is generally <\/span><b>imposed on suppliers or manufacturers who pass it on to the final consumer.<\/b><\/li>\n<\/ul>\n<span class=\"vc_button\"><b>Also Read: <\/b><a href=\"https:\/\/pwonlyias.com\/stage\/udaan\/taxation-system-in-india\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Taxation Systems In India: Classification &#038; Types<\/span><\/a><\/span>\n<p>\u00a0<\/p>\n<table style=\"width: 100.345%;\">\n<tbody>\n<tr style=\"height: 36px;\">\n<td style=\"width: 3458.64%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 36px;\" colspan=\"2\"><span style=\"font-size: 18pt;\"><b>Must Read<\/b><\/span><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 54.4983%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/ncert-notes\/\" target=\"_blank\" rel=\"noopener\">NCERT Notes For UPSC<\/a><\/strong><\/td>\n<td style=\"width: 3404.14%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/daily-current-affairs\/\" target=\"_blank\" rel=\"noopener\">UPSC Daily Current Affairs<\/a><\/strong><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 54.4983%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/blogs\/\" target=\"_blank\" rel=\"noopener\">UPSC Blogs<\/a><\/strong><\/td>\n<td style=\"width: 3404.14%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/\" target=\"_blank\" rel=\"noopener\">UPSC Daily Editorials<\/a><\/strong><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 54.4983%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/quiz\/\" target=\"_blank\" rel=\"noopener\">Daily Current Affairs Quiz<\/a><\/strong><\/td>\n<td style=\"width: 3404.14%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/mains-answer-writing\/\" target=\"_blank\" rel=\"noopener\">Daily Main Answer Writing<\/a><\/strong><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 54.4983%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/mains-previous-year-papers\/\" target=\"_blank\" rel=\"noopener\">UPSC Mains Previous Year Papers<\/a><\/strong><\/td>\n<td style=\"width: 3404.14%; vertical-align: middle; text-align: center; border-style: solid; border-color: #000000; height: 30px;\"><strong><a href=\"https:\/\/pwonlyias.com\/stage\/upsc-test-series-courses\/\" target=\"_blank\" rel=\"noopener\">UPSC Test Series 2024<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>India&#8217;s net direct tax collections rose 17.7% in FY24, indicating higher taxpayer earnings. Personal income tax saw a significant increase.<\/p>\n","protected":false},"author":11,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"tags":[],"paper-wise":[2089],"subject":[],"acf":[],"_links":{"self":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/103591"}],"collection":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs"}],"about":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/types\/current-affairs"}],"author":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/comments?post=103591"}],"version-history":[{"count":5,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/103591\/revisions"}],"predecessor-version":[{"id":103795,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/current-affairs\/103591\/revisions\/103795"}],"wp:attachment":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media?parent=103591"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/tags?post=103591"},{"taxonomy":"paper-wise","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/paper-wise?post=103591"},{"taxonomy":"subject","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/subject?post=103591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}