• UGI USER
  • Apr 22, 2024
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DIRECT TAX COLLECTION SURPASSES 2023-24 TARGET, LED BY INCOME TAX.

Why in the news?

Net direct tax collections exceed 2023-24 target, driven by personal income tax surge; corporate tax contribution declines.

About the Growth in Tax Kitty:

  • India’s net direct tax collections rose by 17.7% in 2023-24, reaching ₹19.58 lakh crore.
  • This surpassed both the Budget estimates and revised estimates by 7.4% and ₹73,000 crore respectively.
  • Personal income tax (PIT) constituted 53.3% of the total net direct tax collection, while corporate taxes formed 46.5%.
  • PIT and securities transaction tax (STT) collections drove the uptick in net tax collections in the final fortnight of the financial year.
source:eduprep
What is Personal income tax (PIT) ?

  • Personal income tax (PIT) is levied by the government on income earned by individuals.
  • Taxpayers must file annual income tax returns to determine their tax liabilities.
  • PIT revenues constitute a significant income source for the Indian government.

What is Direct taxes?

  • Direct taxes are imposed directly on taxpayers by the government.
  • Types of direct taxes include income tax, corporation tax, capital gains tax, wealth tax, gift tax, and more.
  • Direct taxes contribute around half of the government’s annual revenue.

INCOME TAX:

  • Levied on individuals, Hindu undivided families, unregistered firms, and other groups.
  • Progressive taxation system in India.
  • Different income tax rates applied based on net income, with surcharge for higher incomes. Agricultural income exempt.

CORPORATION TAX:

  • Tax on earnings of businesses and corporations, also known as corporate tax.
  • Paid separately from owner’s income tax as companies are separate tax entities.
  • All registered public and private companies in India under the Companies Act 1956 must pay corporation tax.

source:Indian Express