Net Direct Tax Collections in 2022-23 [UPSC Notes]

India’s net direct tax collections have risen 17.63% in 2022-23, as per provisional data released by the Finance Ministry. In this article, we analyse this data from the perspective of the IAS exam Indian economy section of GS paper III.

Net Direct Tax Collections in 2022-23

The provisional Direct Tax collections (net of the refunds) have exceeded the  Budget Estimates (BE) for direct tax revenue.

  • The gross collection showed a growth rate of 20.33 per cent over that in FY22. 
  • In the total gross collection, corporate tax accounted for 16.91 per cent of the growth rate.
  • Gross personal income tax collection including Securities transaction tax (STT) grew 24.23 per cent. 
  • The Monetary Policy Committee of the RBI anticipated a rise in the benchmark interest rate of 25 basis points. In order to control inflation, the RBI has already raised the repo rate by a total of 250 basis points since May ‘23.
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Source: tribuneindia

Important Terms
  • Personal Income tax
    • The two types of direct taxes that are levied on individual income or business earnings are personal income tax and corporate tax.
    • Such taxes cannot be passed from one person to another as a burden.
  • Corporate tax
    • Corporate tax is a direct tax levied on the net revenue or profit generated by firms.
  • Direct tax
    • A tax that is paid directly to the institution that is imposing it by an individual or an organization is known as a direct tax.
  • Indirect tax
    • Indirect taxes are those levied on products or services. Instead of an individual paying the government directly, they are charged on products.
  • Repo Rate
    • The Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds. The repo rate is used by monetary authorities to control inflation.
  • Securities Transaction Tax (STT)
    • Securities Transaction Tax (STT) is a type of turnover tax where the investor is obliged to pay a tax on the total sum received or paid in a transaction done through an exchange.
    • STT is not applicable for commodities and currency transactions and on transactions outside of the exchange.

Read more on taxation in India in the linked article.

Conclusion: The direct tax collection data indicate the recovery from the epidemic, leveraging economic reforms, and improving corporate performance. The momentum ought to inspire more assurance about the prospects for the upcoming fiscal year.

Net Direct Tax Collections in 2022-23:- Download PDF Here

Related Links
Reserve Bank of India (RBI) Cash Reserve Ratio
Disinvestment Policy in India and DIPAM Inflation in Economy
Inflation Targeting UPSC Mains General Studies Paper-III Strategy, Syllabus & Structure

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