Analytical Study of Tax Revenue Collection in India

Taxation is the primary source of income for the government. Taxes collected from both direct tax and indirect tax are the government’s tax revenue. Tax collection is considered as a reflection of the economic condition of any country.  This research paper is based on secondary data. In this research paper analysed total tax collection from financial year 2017-2018 to 2021-2022 in terms of direct and indirect tax. In 2021-22, the total tax revenue reached Rs.27.07 lakh crore with a record increase of 34%, this is about Rs. 5.00 lakh crore more than budget estimate. The total tax collection in financial year 2021-22, there has been a strong growth of 49% in direct tax and 30% in indirect tax. The decrease in tax collection in the financial year 2019-20 and financial year 2020-21 is due to the disruption in economic activity in the wake of covid-19, but the increase in tax collection in the financial year 2021-2022 is a sign that the country's economy is getting back on track. This credit goes to measures related to ease of compliance and the use of data analytics and artificial intelligence to check evasions. The tremendous growth in direct and indirect tax collections in India indicates the strengthening of the Indian economy. The increase in tax collection reflects the Indian economy's recovery from the effects of the Indian government's economic reforms like as demonetisation in 2016 and the introduction of the Goods and Services Tax in 2017, followed by the impact of the Covid-19 pandemic.