Direct taxes jump, in lift for spending

Collections cross 58% budget target, on course to beat goal

- Subhash Narayan & Rhik Kundu

Net direct tax collections in FY24 jumped 22% from a year earlier to touch ₹10.6 trillion, official data released on Friday showed, creating additional spending room for the government in an election year. Provisional data till 9 November showed the government has so far collected 58% of the ₹18.2 trillion budgeted for FY24.

Gross direct tax receipts (without adjusting for refunds of ₹1.77 trillion) were ₹12.37 trillion, 18% above last year’s ₹ 10.52 trillion.

Tax collections that are expected to beat budget estimates may help the government meet its fiscal deficit target and create space for welfare spending, economists said, despite limited progress on the disinvestment front.

Gross goods and services tax (GST) revenues grew strongly in October, with tax collections rising at a 10-month-high pace of 13.4% to hit the second-highest monthly tally of ₹1.72 trillion. Direct tax collections may surpass budgetary estimates yet again, said Amit Singhania, partner, tax, Shardul Amarchand Mangaldas & Co.