2024-11-11 17:26:00
The Union government’s net direct tax collection grew 15.4 percent on year to ₹12.1 lakh crore rupees during the period April 1-November 10, according to a statement.
Direct taxes, which include corporate and personal tax, grew over 21 per cent to ₹15 lakh crore on a gross basis during the period, the statement issued by the Income Tax Department said. Further, it said that it had issued tax refunds of ₹2.9 lakh crore.
Healthy tax collection helps the government meet its fiscal deficit target for a particular year. The Centre is eyeing a 4.9 per cent fiscal deficit target for FY25 as indicated in the July Budget.
Direct taxes, which are levied on the income or profit of a person, are directly paid by an individual or entity to the government without any intermediaries
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**Interview with Dr. Anjali Rao, Economic Analyst**
**Editor**: Thank you for joining us today, Dr. Rao. The recent report indicates a significant growth in net direct tax collections by the Union government. What can you tell us about the implications of this 15.4 percent increase in net direct tax collections?
**Dr. Rao**: Thank you for having me. The growth of 15.4 percent in net direct tax collections during this period is indeed a positive sign for the Indian economy. It suggests that both individuals and corporations are earning better incomes, which translates to enhanced tax contributions. This strong performance is crucial as it helps the government maintain its fiscal health and work towards meeting its fiscal deficit target of 4.9 percent for FY25.
**Editor**: That’s interesting! The report also mentions that direct taxes grew over 21 percent on a gross basis, reaching ₹15 lakh crore. What does this growth indicate about economic activity in general?
**Dr. Rao**: Absolutely, the gross figure indicates robust economic activity. Higher corporate profits and individual earnings typically reflect increased production and consumption within the economy. This uptick can signal confidence in economic policies and a conducive business environment. It can also lead to increased public spending if managed correctly, which can further stimulate the economy.
**Editor**: The statement mentions the issuance of ₹2.9 lakh crore in tax refunds. How does this relate to the overall tax collection and economic strategy?
**Dr. Rao**: Issuing refunds is a crucial aspect of the tax collection process. It not only reflects the government’s commitment to fair taxation but also ensures that individuals and businesses have liquidity to reinvest or spend. This can create a positive cycle where consumers have more cash flow, driving demand, which in turn can lead to increased production and further tax revenue.
**Editor**: Given these figures, what should we look out for in the upcoming fiscal policies from the government?
**Dr. Rao**: We should expect the government to focus on sustaining this momentum. Aiming for a balanced budget while promoting growth will likely lead to investments in infrastructure and social welfare programs. Additionally, evaluating taxation policies to ensure fairness and compliance will be key to sustaining and growing direct tax collections.
**Editor**: Thank you, Dr. Rao, for your insights. It’s clear that understanding tax collections and economic indicators is crucial for forecasting future economic health.
**Dr. Rao**: Thank you! It’s always a pleasure to discuss these important economic trends.