According to official statistics, the effectiveness of the income tax department has quickly grown over the previous ten years as refunds from direct tax collection surpassed the Rs 2 lakh mark in the financial year (FY) 2024-2025.

The report shows that direct tax collection was Rs 9.95 lakh crore for the current fiscal year (April 1 to September 17), increasing 16.12% over the same time the previous year.

During this time, tax refunds also surged, rising by 56.49% to Rs 2.05 lakh crore over the previous year.

The amount collected in Securities Transaction Tax (STT) has risen to Rs 26,154 crore.

The amount of advance tax collected has grown annually to Rs 4.36 lakh crore, an increase of 22.61%. The amount of advance personal income collected has gone up by 39.22%. There has been an 18.17% rise in corporation tax.

Gross direct tax collection, including refunds, rose by 21.48% to Rs 12.01 lakh crore for the year.

The government’s objective for direct tax collection in the current fiscal year is Rs 22.12 lakh crore (personal income tax, corporation tax, and other taxes). This is a 13% increase over the previous fiscal year.

Refunds are being processed more quickly now that the average ITR processing time has dropped from 93 days in 2013 to 10 days, according to Finance Minister Nirmala Sitharaman.

This has been made possible by the gradual simplification of the individual tax regime and the implementation of new income tax return systems and procedures, which have made submitting tax returns simpler.

The robust GDP growth is the cause of the rise in direct tax revenue. The growth rate of the Indian economy for the fiscal year 2023-24 was 8.4%. In FY 2024–2025, it is projected to rise at a pace of 7.2%.