Key Points

Since FY 2021-22, the growth in net direct tax collection has been robust, Minister of State for Finance, Pankaj Chaudhary, told the Lok Sabha in a written reply.

The total revenue impact on account of tax benefits extended to companies was Rs 88,109.27 crore and Rs 98,999.57 crore (projected) in FY 2022-23 and FY 2023-24, respectively.

"The above tax benefits have the impact of making the corporates competitive and encouraging investment and, therefore, economic growth," the minister said.

To encourage startups, initiatives taken have resulted in an increase in the number of startups claiming deduction under Section 80IAC of the Income Tax Act from 328 in AY 2022-23 to 877 in AY 2024-25.

Further, the number of companies covered under Section 80JJAA in respect of employment of new employees has increased from 2,838 in AY 2022-23 to 3,644 in AY 2024-25, said Chaudhary.

"The specific incentives are provided in the Income-tax Act through the Finance Bill. The initiatives taken have led to the generation of employment, an increase in tax revenue and overall economic growth," he noted.

In order to create a globally competitive business environment for domestic companies, attract fresh investment and create employment opportunities, section 115BAA and section 115BAB were introduced in the Income Tax Act through the Taxation Laws (Amendment) Act, 2019.

The impact of Section 115BAB is reflected in a significant growth of new manufacturing companies from 2,928 in AY 2022-23 to 7,185 in AY 2024-25, according to the minister.

India's total gross direct tax collections (before adjusting for refunds) have more than doubled in the last five years, reflecting the high economic growth and improved tax compliance in the country, which has been encouraged with the introduction of the new digital technology.

- IANS