India’s income tax revenues up 17.7% year-on-year in 2023/2024, nearly $235 billion

By Manoj Kumar

NEW DELHI (Reuters) – India’s income tax revenues, comprising personal and corporate levies, rose 17.7% year-on-year to nearly $235 billion in the 2023/24 financial year ended March, reflecting rising incomes of wealthy taxpayers and corporations. gain.

Net income tax revenue for the 2023/24 financial year ended March rose to 19.58 trillion rupees ($234.9 billion), compared to 16.64 trillion in the previous financial year, the Central Board of Direct Taxes (CBDT) said on Sunday .

Net tax collections are 7.4% higher than the government’s initial budget target set in February 2023, said a statement from the CBDT, a wing of the federal finance ministry.

The government revised its income tax collection target for 2023/2024 to Rs 19.45 trillion in February this year, while presenting the interim budget for 2024/2025.

The announced figures exceeded the revised target.

Net income tax collections, which include a securities transaction tax levied on transactions in securities such as shares and mutual funds, rose by a quarter to 10.44 trillion rupees ($125.3 billion) in 2023/24 from a year earlier.

Meanwhile, corporate tax revenues rose 10.26% to 9.11 trillion rupees ($109.3 billion), compared with 8.26 trillion rupees in the same period, the statement said.

“This is good news,” said Arun Kumar, an economist and former professor at Jawaharlal Nehru University in Delhi, adding that the figures were also a “sign of rising income inequality”.

The number of taxpayers filing income tax returns rose to almost 82 million in 2023/2024, up 9% on the previous financial year, according to government estimates.

The higher growth in income taxes, paid mainly by relatively wealthy individuals and large corporations, reflected their rising incomes and higher stock market returns.

Economists say only a small share of Indian households earned above the annual tax-free threshold of 300,000 rupees ($3,599), while most agricultural income was exempt from tax due to the small, often subsistence size of farm plots.

Wages of workers in small businesses and the agriculture sector, which employ nearly 90% of India’s workers, grew at a much slower pace amid record unemployment among educated youth, Kumar said.

Inequality in India has become more severe since the early 2000s, with the share of income and wealth held by the richest 1% of the population rising to over 22% and 40% respectively in 2022/2023, he said, citing a World Inequality Lab. report.

($1 = 83.3580 Indian Rupees)

(Reporting by Manoj Kumar; Editing by Mark Heinrich)