Govt Likely to Surpass FY25 Direct Tax Target, Says CBDT Chief

The government is on track to surpass its direct tax collection target of ₹22.07 lakh crore for FY25, according to Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal. He announced this during the inauguration of the Taxpayers’ Lounge at the India International Trade Fair. 

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The target for this fiscal year includes ₹10.20 lakh crore from corporate tax and ₹11.87 lakh crore from personal income tax and other taxes.

As of November 10, net direct tax collections have grown by 15.41%, reaching ₹12.11 lakh crore. This marks a significant improvement compared to the budget's projected growth rate of 12.8%. The collections so far represent 55% of the annual target, giving policymakers confidence about achieving their goal.

Ravi Agarwal told reporters, “It is hoped and we are confident that we will not only meet the budget target, but will also exceed the target. The trend in tax collection is very positive for both corporate and non-tax collections. Refunds are also issued promptly.”

The growth in direct tax revenue is driven by both corporate and non-corporate tax collections. Corporate taxes have contributed ₹5.10 lakh crore, while non-corporate taxes, which include personal income taxes and others, have reached ₹6.62 lakh crore.

Focus on Foreign Asset Disclosures

The CBDT is urging taxpayers to disclose any foreign income or assets that have not been reported in their Income Tax Returns (ITRs). Taxpayers have until December 31 to file revised returns for fiscal year 2023-24. 

Under the Automatic Exchange of Information (AEOI) framework, India receives data on foreign accounts and assets held by its taxpayers. The tax department is using this information to identify cases of non-disclosure, especially for high-value assets. SMS and email reminders are being sent to individuals encouraging compliance.

Agarwal mentioned that lack of awareness could be a reason for non-disclosure. He also clarified that taxpayers now have an opportunity to regularize their foreign asset reporting without facing severe penalties.

Simplifying the Income Tax Act

The CBDT is also working on a comprehensive review of the Income Tax Act, 1961, to simplify its language and remove outdated provisions. They have received over 6,000 suggestions from the public for this initiative.

Finance Minister Nirmala Sitharaman had announced this review, aiming to make the Act easier to understand and reduce litigation. The CBDT has formed 22 specialized sub-committees to examine different aspects of the law.

Efforts Toward Transparency and Compliance

To promote transparency, the tax department recently launched a compliance-cum-awareness campaign. This initiative aims to help taxpayers accurately report foreign assets and income in their returns.

The campaign aligns with the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which mandates full disclosure of foreign holdings.

In Conclusion 

With strong growth in tax collections and efforts to improve compliance, the government is well on its way to surpassing its direct tax target for FY25. The proactive steps to simplify tax laws and encourage transparency, along with the ongoing compliance efforts such as reminding taxpayers to declare foreign assets, are also helping to build trust among taxpayers. As the year progresses, these measures are expected to continue driving positive results, ensuring the government meets and potentially exceeds its fiscal goals.