Budget 2024: What next for India's booming tax collections?

For the third year in row, the government's gross tax collections are set to post double-digit growth rate in 2023-24. More importantly, the rise in tax mop-up so far this year has been more than expected.

The Budget for 2023-24 had estimated that gross tax collections would amount to Rs 33.61 lakh crore this year, 10.4 percent higher than the revised estimate for 2022-23. But as per latest data, the tax collected in the first eight months of the year has been nearly 15 percent more than what the finance ministry had managed to mop up in April-November 2022.

Also Read: GDP growth-tax collections relationship is now complicated

To get a sense of how the final numbers could turn out to be, one can just look at 2022-23. The finance ministry started with a gross tax collection budget estimate of Rs 27.58 lakh crore. On February 1, 2023, this estimate was revised up by 10.3 percent to Rs 30.43 lakh crore. Finally, the actual tax collected, according to the Controller General of Accounts, was nearly half a percent higher at Rs 30.54 lakh crore.