Govt estimates 13.4% rise in tax receipts despite raising exemptions, with direct tax share hitting 60% in FY26
Chennai: Despite the Centre's move to increase tax exemption limit to Rs12 lakh annual income and making 30 per cent tax slab payable for those with Rs 24 lakh income, the personal income tax receipts of the government are estimated to go up by 13.4 per cent. Both personal income tax and direct taxes will see their share in revenue receipts going up in FY26.
“The important highlight of the Finance Bill is increasing the threshold limit for taxation to Rs 4 lakh crore, providing exemption till Rs 12 lakh and raising the tax slab of 30 per cent for those above Rs 24 lakh instead of Rs 15 lakh earlier,” said J B Mohapatra, former Chairman, Central Board of Direct Taxes.
Despite foregoing Rs one lakh crore in personal income tax receipts, the total tax receipts are estimated to go up to Rs 13.5 lakh crore in FY26 against Rs 11.9 lakh crore in the revised estimate of FY25.
“The government has widened the tax base by bringing in more people in the tax net and this has helped it see higher tax revenues,” said Mohapatra.
Similarly, the Securities Transaction Tax too is estimated to go up to Rs 78,000 crore in FY26 against Rs 55,000 crore in RE of FY25. The government expects more people to pay STT in the next fiscal year compared to last year.
This has helped direct tax increase its share in the tax kitty to 60 per cent against 58 per cent in FY25.