Net direct tax collection reaches highest-ever in FY 22

Tags: Economy/Finance Economics/Business

The net direct tax collections (income tax and corporate tax) reached an all time high of Rs 14.09 lakh crore in the financial year 2021-22. it was Rs 9.45 lakh crore in FY 2020-21.

• The net direct tax collection has increased by 49.02 per cent during the financial year 2021-22.

• an increase in direct tax collection signals that the Indian economy has bounced back after two years of the pandemic.

• As far as Income Tax and Corporation Tax are concerned, the collection is the best ever.

• What are Direct Taxes?

• Direct tax can be defined as a tax that is paid directly by an individual or organisation to an imposing entity (usually the government).

• The Central Board of Direct Taxes deals with matters relating to levy and collection of direct taxes and formulation of various policies relating to direct taxes.

• A taxpayer pays direct taxes to the government for various purposes, including real wealth tax, personal wealth tax, income tax on property, gift tax, capital gains tax, etc.

• Direct tax-to-GDP ratio

• It is around 12%.

• The Central Board of Direct Taxes (CBDT) is working to increase this ratio to 15-20% in 5-10 years.