Under the leadership of Prime Minister Narendra Modi, personal income and corporate tax collections are anticipated to exceed Rs 19 lakh crore in the next decade.
With Prime Minister Narendra Modi at the helm, India's tax scenario is set for a significant upswing, with forecasts pointing towards a climb beyond Rs 19 lakh crore in the coming decade. The projected increase in collections is seen as providing the government with an enhanced financial capacity to implement more taxpayer-friendly measures, as reported by PTI.
Net direct tax collections, covering personal income tax and corporate tax, have followed an impressive trajectory, escalating from Rs 6.38 lakh crore in FY 2013-14 to a noteworthy Rs 16.61 lakh crore in FY 2022-23. This fiscal year alone has witnessed a robust 20% growth in collections, pushing estimates towards the Rs 19 lakh crore mark by March 31, 2024.
Over the years, the government has actively worked to streamline the tax regime by implementing reduced rates and curtailing exemptions. Initiatives such as incentivizing lower tax rates for corporates and individuals who opt out of exemptions have been put in place, aligning with the goal of simplifying taxation.
In the 2023-24 Budget, adjustments to the individual income tax system further enhanced the proposition for taxpayers. The introduction of a more attractive tax structure, featuring elevated basic exemption limits and the inclusion of standard deductions, aims to alleviate the tax burden on individuals.
Nevertheless, proposals like incorporating credit card foreign currency spending into the RBI's Liberalised Remittance Scheme (LRS) faced staunch opposition, leading to a postponement due to potential compliance issues.
Concurrently with the surge in direct tax collections, GST collections have experienced a notable upswing, reaching a monthly peak of Rs 1.87 lakh crore in April 2023. Particularly noteworthy are the recent discussions by the GST Council, which clarified the taxation framework for online gaming, introducing a 28% tax levy upon entry and requiring overseas gaming entities to register with GST authorities.
The imposition of the highest tax rate has impeded the rapid growth of the online gaming industry, raising expectations for a reevaluation by the government and potential court rulings to provide relief for stakeholders.
With the upcoming general elections on the horizon, the government is preparing to introduce a vote on account in February, with the complete Budget expected in July 2024.
