Uttar Pradesh Ranks 9th in Direct Tax Collection Despite Being Most Populous - Read Now
Uttar Pradesh is 9th in direct tax collection, while Maharashtra leads with ₹7.62 lakh crore in 2023-24. Explore the tax landscape.
Oct 19, 2024, 18:27 IST
In 2023-24, the financial year, India experienced the phenomenal direct tax collection of ₹19.62 lakh crore. Maharashtra tops this list, but the most populous state Uttar Pradesh is at the 9th place at a paltry ₹48,333.44 crore collection in the nation's exchequer.
There was a heavy contribution from Maharashtra. The amount was ₹7,61,716.30 crore, which accounted for an impressive 39% of the total amount of direct tax collected, according to data from the Central Board of Direct Taxes. This starkly contrasts with Uttar Pradesh and shows a wide rift between the states in generating taxes.
Karnataka and Delhi follow in the second and third places with contributions in direct taxes amounting to ₹2.35 lakh crore and ₹2.03 lakh crore. Tamil Nadu ranks fourth with a tax contribution of ₹1.27 lakh crore. Gujarat and Telangana occupy the last two places in the top six, with contributions at ₹93,300 crore and ₹84,439 crore respectively.
Direct tax collection comprises income tax, corporate tax, and STT. An increase in the revenue from direct tax is an indication of the need to build up the tax base as well as recovery mechanisms for states such as Uttar Pradesh.
Experts believe that a far greater reason behind the higher tax collections in Maharashtra and Karnataka lies in the intense economic activities being witnessed in these states. While the government has been adding to this trend by moving towards ease of doing business, the states could do more to increase their tax revenue and narrow the gap with leading states.
As the Indian economy evolves, one would expect dynamics in the direct tax collection; it is truly critical, both for the policymakers as well as the private sector players. The analysis leads to inferences that Uttar Pradesh badly needs strategies for improving tax compliance and increasing its tax base with regard to population size.
There was a heavy contribution from Maharashtra. The amount was ₹7,61,716.30 crore, which accounted for an impressive 39% of the total amount of direct tax collected, according to data from the Central Board of Direct Taxes. This starkly contrasts with Uttar Pradesh and shows a wide rift between the states in generating taxes.
Karnataka and Delhi follow in the second and third places with contributions in direct taxes amounting to ₹2.35 lakh crore and ₹2.03 lakh crore. Tamil Nadu ranks fourth with a tax contribution of ₹1.27 lakh crore. Gujarat and Telangana occupy the last two places in the top six, with contributions at ₹93,300 crore and ₹84,439 crore respectively.
Direct tax collection comprises income tax, corporate tax, and STT. An increase in the revenue from direct tax is an indication of the need to build up the tax base as well as recovery mechanisms for states such as Uttar Pradesh.
Experts believe that a far greater reason behind the higher tax collections in Maharashtra and Karnataka lies in the intense economic activities being witnessed in these states. While the government has been adding to this trend by moving towards ease of doing business, the states could do more to increase their tax revenue and narrow the gap with leading states.
As the Indian economy evolves, one would expect dynamics in the direct tax collection; it is truly critical, both for the policymakers as well as the private sector players. The analysis leads to inferences that Uttar Pradesh badly needs strategies for improving tax compliance and increasing its tax base with regard to population size.
