Under the leadership of Prime Minister Narendra Modi, India’s tax landscape is poised for a substantial uptick, with projections indicating a climb beyond Rs 19 lakh crore over the next decade.
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This forecasted surge in collections reflects a bolstered financial scope for the government to introduce more taxpayer-friendly measures, PTI reported.
Net direct tax collections, encompassing personal income tax and corporate tax, have displayed a remarkable trajectory, ascending from Rs 6.38 lakh crore in FY 2013-14 to an impressive Rs 16.61 lakh crore in FY 2022-23. This fiscal year alone has seen a robust 20% growth in collections, propelling estimates towards the Rs 19 lakh crore mark by March 31, 2024.
Over the years, the government has diligently endeavoured to streamline the tax regime by offering reduced rates and curbing exemptions. Initiatives such as incentivised lower tax rates for corporates and individuals who forgo exemptions have been implemented, aligning with the agenda to simplify taxation.
In the 2023-24 Budget, amendments to the individual income tax regime further sweetened the deal for taxpayers.
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The introduction of a more enticing tax structure, including raised basic exemption limits and the incorporation of standard deductions, aims to alleviate the tax burden on individuals.
However, proposals such as the inclusion of credit card foreign currency spending under the RBI’s Liberalised Remittance Scheme (LRS) faced strong opposition, leading to a deferment due to potential compliance issues.
In tandem with direct tax growth, GST collections have soared, hitting a monthly peak of Rs 1.87 lakh crore in April 2023. Notably, the GST Council’s recent deliberations clarified the taxation framework for online gaming, instituting a 28% tax levy at the time of entry and mandating overseas gaming entities to register with GST authorities.
The imposition of the highest tax rate has curtailed the rapid expansion of the online gaming industry, prompting expectations for governmental reconsideration and potential court judgments to provide relief for stakeholders.
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As the country gears up for the upcoming general elections, the government is set to present a vote on account in February, with the full Budget anticipated in July 2024.
