Statsguru: Six charts explain govt's tax collections are beating estimates

The Union government’s tax collections are beating estimates. The latest July figure showed nearly 20 per cent growth in the gross direct tax collections for 2024-25 (FY25) to Rs 6.5 trillion (chart 1), largely driven by an increase in advance tax payments.
 

 

The Budget on Tuesday is likely to increase the tax revenue projections by Rs 30,000-40,000 crore compared to the Interim Budget in February, Business Standard had reported earlier. Gross tax revenue as a percentage of gross domestic product (GDP) was already near its highest level in many years (chart 2).

 

Personal income-tax collections have been larger (Rs 3.6 trillion) compared to corporation tax collections (Rs 2.7 trillion) so far this year. The growth rate is also higher for personal income- tax collections, shows government data (chart 3).

 

Individuals are declaring more capital gains than before, according to an analysis of data previously released by the government. growth in capital gains declared over the last decade is 23.5 per cent, compared to 15.5 per cent for salary income (chart 4).

 

Booming stock markets have attracted a large number of investors. The activity has continued into the current year, at least going by securities transaction tax collections, which have more than doubled so far in FY25  (chart 5).

 

Stock market investors have traditionally been concentrated in a few states, though equity culture is now spreading. This may have implications on the state-wise mix of taxes going forward.
 

Two states contributed half of the total direct tax revenue in the country since FY19. Maharashtra with the financial capital and the political capital of Delhi together make up 50 per cent of the total tax revenues. These are followed by Karnataka at 11.6 per cent, Tamil Nadu at 6.5 per cent and Gujarat at 4.9 per cent (chart 6).