India’s Evolving Income Tax System: An Analysis of Direct Tax Collection Trends, the New Tax Regime and Digital Tax Administration in India

Author

CS Dr. Nitin Prakash Jain


Abstract

 India's income-tax system has undergone significant changes in recent years, particularly through the expansion of digital tax administration and the gradual shift towards the new tax regime under Section 115BAC of the Income-tax Act, 1961. The present study examines recent trends in direct-tax collections and selected changes in individual taxation. The study is based on secondary data obtained from the Central Board of Direct Taxes (CBDT), the Income Tax Department and Government of India documents.

 The quantitative analysis covers FY 2023–24 to FY 2025–26, while the policy analysis focuses on changes applicable from AY 2024–25 to AY 2026–27. Percentage growth, comparative analysis and trend analysis are used. Net direct-tax collection increased from ₹19.60 lakh crore in FY 2023–24 to ₹22.26 lakh crore in FY 2024–25 and further to ₹23.40 lakh crore in provisional FY 2025–26 data. The new tax regime became the default regime from AY 2024–25, while the Section 87A rebate was increased for eligible resident individuals from AY 2026–27. The study indicates a movement towards simplified taxation, digital administration and information-based compliance.



Keywords

Income Tax, Direct Tax, New Tax Regime, Section 115BAC, Section 87A, Tax collection, Digital Tax Administration, India



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References


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