A government official mentioned in a Reuters story that, maintaining the current momentum in direct tax growth could prove difficult for the government in FY24.
Next year’s direct tax collections are anticipated to be impacted by the economy’s slower development, and the government may face lower revenue generation. In her budget address on February 1, Finance Minister Nirmala Sitharaman will discuss the estimates for tax revenue for the following year.
It should be noted that from April 2022 to January 10, 2023, direct tax receipts totaled Rs 12.31 trillion, expanding at a rate of 19.5% annually.
Although income tax collections have increased significantly in the current fiscal year, a government official warned that weaker nominal GDP growth in the coming year could have an impact on collections in FY24. Corporate tax may suffer as well because businesses are already feeling the effects of a slowing demand.
There is a good likelihood that expenditure on expansionary measures will be constrained in order to decrease the fiscal deficit if the government forecasts a slowdown in tax revenues in FY24.
The Union Budget 2023 will be unveiled on February 1 by Finance Minister Nirmala Sitharaman, and the strategy for the next year will mostly centre on fiscal consolidation and long-term growth.
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