India’s net direct tax collection surged by 22.5 per cent to Rs 6.93 lakh crore during the current financial year so far (April 1 to August 11) which is expected to keep the country firmly on the path of fiscal consolidation.

The net direct tax collection includes Personal Income Tax (PIT) collection of Rs 4.47 lakh crore and Corporate Tax collection of Rs 2.22 lakh crore.

Securities Transaction Tax (STT) raked in Rs 21,599 crore, while other taxes (which include equalisation levy and gift tax) yielded Rs 1,617 crore, according to the latest data released by the government.

As per official data, refunds worth Rs 1.20 lakh crore were issued between April 1 to August 11, a growth of 33.49 per cent.

On a gross basis, direct tax collection grew 24 per cent to Rs 8.13 lakh crore.

The collection includes PIT of Rs 4.82 lakh crore and Corporate Tax of Rs 3.08 lakh crore.

Gross PIT collections have shown a robust increase in 2024-25 so far, compared to the corresponding figure of Rs 3.91 lakh crore in the same period of 2023-24.

The government has budgeted to collect Rs 22.07 lakh crore in the current fiscal from direct taxes.

The strong growth in direct tax collections is backed by an equally robust growth in GST collections which clocked a double digit growth of 10.3 per cent to surpass the Rs 1.82 lakh crore mark in July.

The net Goods and Services Tax (GST) collection after adjusting refunds was over Rs 1.66 lakh crore, a growth of 14.4 per cent.

Higher tax collections help to reduce the country’s fiscal deficit and strengthen the fundamentals of the economy.

Finance Minister Nirmala Sitharaman in the Union Budget 2024-25 has fixed the fiscal deficit at 4.9 per cent of the GDP despite higher allocations for social welfare schemes due to robust tax collections in a fast-growing economy.

Sticking to the fiscal consolidation path will help to ensure a stable growth path for the economy as a lower deficit helps to keep inflation in check.

“The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.01 lakh crore and Rs 11.63 lakh crore respectively. Both will be less than that in 2023-24,” the Finance Minister said.

The reduced borrowings by the government will leave more money in the banking system for companies to borrow for investments which will help to spur growth and create more jobs.

FM Sitharaman said that for the year 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs 32.07 lakh crore and Rs 48.21 lakh crore respectively.

The net tax receipts are estimated at Rs 25.83 lakh crore.

“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year,” the Finance Minister said in her budget speech.