Personal Income Tax Outpaces Corporate Tax Growth in India: A 4-Year Trend

• Personal income tax collections are projected to reach ₹14.4 lakh crore in FY26, significantly exceeding corporate tax estimates of ₹10.8 lakh crore.
• Between FY22 and FY25, personal income tax grew at a CAGR of 22% (₹12.6 lakh crore), while corporate tax grew at 11.2% (₹9.8 lakh crore).
• Personal income tax is now the largest contributor to direct tax revenues, expected to rise to around 4% of nominal GDP.
• The surge in income tax is attributed to an expanding tax base, improved compliance, technology use, and increased income, with returns filed growing from 6.9 crore to 9.2 crore.
• Corporate tax growth, though slower, also saw an increase in collections and active companies, despite a 2019 tax rate cut to stimulate manufacturing.

Why It Matters: Personal income tax growth consistently outpaces corporate tax, becoming India's largest direct tax contributor.