Higher Tax Refunds Signal Formalization

Income tax refunds rose 474% since FY14, outpacing the 274% growth in gross direct tax collections

- Gireesh Chandra Prasad

Tax refunds over the last decade have surged faster than growth in gross direct tax revenue collections, a person informed about the development said on Sunday, showing increased formalization of the economy.

Gross direct tax revenue collections have jumped 274% since financial year 2014 (FY14) to ₹27 trillion in FY25. In comparison, income tax refunds shot up at a much faster clip of 474% during this period to ₹4.76 trillion.