India's corporate tax collection has more than doubled from Rs 4,57,719 crore in 2020-21 to Rs 9,86,767 crore in 2024-25, the Parliament was informed on Tuesday.
Minister of State for Finance Pankaj Choudhary told in the Rajya Sabha, aid in a written reply to a question, that the RBI, in the article "Resilience and Revival: India's Private Corporate Sector" in its monthly bulletin for October 2025, has stated that during Covid, despite contraction in sales, decline in raw material cost due to softening of commodity prices, subdued wage growth, along with the favorable base effect, net profit at aggregate level rose sharply by 115.6 per cent.
Consequently, net profit margin surpassed its pre-Covid level. During post-Covid period, with a sharp rebound in sales growth led by pent-up demand, corporates' profit increased significantly from Rs. 2.5 lakh crore in 2020-21 to Rs. 7.1 lakh crore during 2024-25.
The corresponding increase in corporate taxes between FY 2020-21 to FY 2024-25 is more than 200 per cent despite a reduction in corporate rates, the minister stated.
Chaudhary said that corporate tax rates have been gradually reduced over the years since 2016 to promote growth, boost investment and create more job opportunities. At the same time, exemptions and incentives available to the corporates have also been phased out to simplify the tax system.
The Finance Act, 2016, reduced corporate tax rates to 29 per cent of the total income. Then, under the Finance Act, 2017, the corporate tax rates were reduced to 25 per cent of the total income to inter alia make smaller domestic companies having an annual turnover of Rs 50 crore more viable and to encourage firms to migrate to the company format. Similarly, in 2019, corporate tax rates were reduced to 22 per cent.
Vide the Finance Act, 2024, tax rates have been reduced from 40 per cent to 35 per cent on the income of foreign companies (other than that chargeable at special rates) to promote investment and employment.
The minister highlighted that the tax base over the years has increased, which can be attributed to several legislative, administrative and enforcement measures taken by the government to improve voluntary compliance and widen the tax net.
These include NUDGE (Non-intrusive usage of data to guide and enable) taxpayer campaigns to improve the compliance ecosystem and to assist taxpayers in reviewing their ITRs and correcting mistakes, if any, by filing revised ITRs.
Expansion of the scope of provisions of TDS and TCS to cover more types of financial transactions, expansion and strengthening of third-party financial transaction reporting to obtain a wider range of data to identify tax evasion or under-reporting of income were other measures taken in this regard.
Besides, the implementation of the non-filers monitoring system (NMS) to identify potential taxpayers on the basis of third-party data and mandatory quoting of PAN and linking of PAN and Aadhaar helped to expand the tax base.
Action was also initiated against the generation and use of black money both inside and outside the country through legislations such as the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and the Benami Transactions (Prohibition) Amendment Act, 2016.
Apart from this promotion of voluntary compliance through a high level of taxpayer service, expeditious resolution of grievances, ease of paying taxes and filing returns, promotion of digital transactions was also undertaken to enhance tax collections, the minister added.
(With inputs from IANS)
