Union Government Likely to Increase Tax Revenue Projections for 2024-25 in Upcoming Budget

The Union government is gearing up to potentially increase its tax revenue projections for the fiscal year 2024-25 by a significant amount in the upcoming Budget. According to sources familiar with the matter, the government is looking at a possible increase of Rs 30,000-40,000 crore, driven by higher economic growth projections and enhanced tax buoyancy.

One official stated, “We could expect a revision of Rs 15,000-20,000 crore each in direct and indirect taxes in the Budget, in line with higher GDP growth projections and the current robust trend in tax collection.”

In the Interim Budget, gross tax revenue for FY25 was projected at Rs 38.3 trillion, reflecting a 10.7 per cent increase from the previous fiscal year. The government aims to raise Rs 21.99 trillion from direct taxes and Rs 16.31 trillion from indirect taxes in the ongoing financial year.

So far in FY25, net direct tax collection has seen a significant increase of 19.54 per cent to over Rs 5.74 trillion, driven by higher advance tax payments from corporations. On the indirect tax front, the government targets to raise Rs 10.67 trillion from GST in FY25, compared to Rs 9.57 trillion in FY24.

Monthly gross GST collections are expected to remain above the Rs 1.6 trillion mark, with April 2024 setting a new record at Rs 2.1 trillion. Economists believe that the strong momentum in the economy will lead to robust performance on both direct tax and GST fronts, allowing the government to focus on capital expenditure plans and welfare schemes.

With the upcoming full Budget, the government is expected to strike a balance between the demands of coalition partners and growth targets to promote development and ensure economic stability. Stay tuned for more updates on the Union Budget for 2024-25.