Direct tax-to-GDP ratio, which reflects the share of taxes in the overall output generated in the country, rose to a 15-year high of 6.11 per cent in the financial year 2022-23, time-series data released by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance showed Tuesday. This was accompanied by an increase in the income tax return filers in India to 7.4 crore in FY23, up 6.3 per cent from FY22, even as the tax buoyancy — the growth rate of taxes in relation to the economy’s nominal growth rate — declined to 1.18 in 2022-23 from 2.52 in 2021-22 and 1.29 in the pre-Covid year of 2018-19.
The cost of tax collection — indicating the expenditure on tax collection as a proportion of the total tax collections — inched lower to 0.51 per cent in FY23, the lowest level since 2000-01, but it increased in absolute terms to Rs 8,452 crore, the highest level since 2000-01, the year for which data is last available, the CBDT data showed.
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