The tax revenues in India mark a record high in a post-pandemic economy FY 2021-22 revenue Rs. 27.07 lakh crore.
This revenue is up 34% over previous year.
Various measures have been taken by tax administration on direct as well indirect taxes to nudge higher compliance through use of technology and artificial intelligence.
As a remarkable testimony to the rapid recovery of the Indian economy following successive waves of COVID-19, India reported revenue collections of Rs. 27.07 lakh crore (as per the pre-actual figures) in the financial year 2021-22.
This figure is almost Rs. 5 lakh crore above the estimates of the Union Budget 2021-22.
This marks a growth of 34% over last year’s revenue collection of Rs. 20.27 lakh crore, led by growth of 49% in direct taxes and supported by 20% growth in indirect taxes, the official note said.
The decrease in tax collection for two financial years 2019-20 and 2020-21 is due to disruption in economic activity in wake of COVID, but the rise in tax collection in both direct and indirect in the financial year 2021-22 is evidence of a sharp rebound and an economy that is back on track.
The surge in tax revenues has lifted India’s tax-GDP ratio for the year 2021-22 to 11.7%.
This includes a direct tax to GDP ratio at 6.1% and indirect tax to GDP ratio at 5.6%.
This significant revenue growth has been propelled by robust economic recovery following the onslaught of the global pandemic, supported by one of the largest immunization programme of the world run by the Government. This was also supplemented with better compliance efforts in taxation. The trend in tax-to-GDP ratio, characterised by a marked rise in recent years.
Several initiatives taken by the Government under its mission to push for a Digital India have laid the foundation for modern, convenient and transparent taxation system. These include the Faceless Assessment System, the e-filing portal and rolling out of the new Annual Information Statement (AIS) for easier filing of income tax returns, and the generation of e-way bills under the GST system, among others.
