Projected Threefold Growth in Tax Collection Under Modi’s 10-Year Governance

In the span of 10 years under Prime Minister Narendra Modi’s leadership, both personal income and corporate tax collections in India are expected to surge to over Rs 19 trillion. This substantial growth provides the government with flexibility to introduce tax measures benefiting the public.

I. Revenue Growth Trajectory

1. Net direct tax collections, accounting for personal income tax and corporate tax, escalated from Rs 6.38 trillion in FY 2013-14 to Rs 16.61 trillion in FY 2022-23.
2. The current fiscal year exhibits a 20% increase in collections, projecting a total mop-up of around Rs 19 trillion by March 31, 2024—surpassing the estimated Rs 18.23 trillion in the 2023-24 Budget.

II. Simplification of Tax Regime

1. Over the years, the government has endeavored to simplify the tax regime by reducing rates and minimizing exemptions.
2. In 2019, a lower tax rate was introduced for corporations relinquishing exemptions, a scheme extended to individuals in April 2020.

III. People-Friendly Tax Measures

1. The 2023-24 Budget enhanced the attractiveness of the new income tax regime for individuals by rationalizing tax slabs, raising the basic exemption limit to Rs 3 lakh, and introducing a standard deduction of Rs 50,000.
2. The government’s attempt to include credit card spending in foreign currency under the RBI’s Liberalised Remittance Scheme faced opposition, leading to a deferral of the proposal.

IV. Widening Tax Base

1. Indicating a widening tax base, individual taxpayers filing returns increased by 90% from 3.36 crore in 2013-14 to 6.37 crore in 2021-22.
2. As of October 26, 2023, 7.41 crore returns have been filed for the current fiscal year, including 53 lakh returns from first-time filers.

Questions Related to Exams

1. How has the government worked towards simplifying the tax regime over the years?
2. What specific tax measures were introduced in the 2019 and 2020 fiscal years for corporations and individuals?
3. How much are personal income and corporate tax collections projected to grow under the Modi government in the next 10 years?
4. What factors contribute to the anticipated increase in net direct tax collections?

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