India’s corporate tax collection has more than doubled over the past five financial years, rising from ₹4,57,719 crore in FY 2020-21 to ₹9,86,767 crore in FY 2024-25. The figures were shared by minister of state for finance Pankaj Chaudhary in a written reply in the Rajya Sabha on December 3, according to data reported by IANS.
Chaudhary cited the RBI’s October 2025 bulletin titled Resilience and Revival: India’s Private Corporate Sector, which observed a sharp rise in corporate profitability during the Covid period despite shrinking sales. Lower raw material costs, subdued wage growth and favourable base effects pushed aggregate net profits up by 115.6%, even as the broader economy remained under stress.
According to the minister, this momentum carried into the post-pandemic years. Corporate net profits jumped from ₹2.5 lakh crore in FY 2020-21 to ₹7.1 lakh crore in FY 2024-25 as pent-up demand lifted sales across sectors. The sharp rise in profit margins also pushed tax collections
Chaudhary told the House that the surge in tax revenue—more than 200% over five years—came even as corporate tax rates were steadily lowered to boost growth and investment.
Domestic corporate tax rates have been reduced from 30% in 2016 to 22% since 2019. For foreign companies, the rate was brought down from 40% to 35% under the Finance Act, 2024. The minister suggested that lower rates, alongside wider economic recovery, contributed to improved compliance and higher collections.
The government has rolled out a series of legislative and administrative steps to broaden the tax base. These include:
– NUDGE campaigns encouraging accurate filing of income tax returns
– Wider coverage of TDS and TCS
– Mandatory third-party reporting of financial transactions
– Use of non-filers monitoring systems
Chaudhary also pointed to structural reforms such as linking PAN with Aadhaar, anti–black money legislation and the push for digital payments. Together, these measures aim to improve transparency and strengthen tax collection.
The rise in collections appears to reflect not just post-pandemic recovery, but also a gradual formalisation of India’s corporate ecosystem. Investors and policymakers will now watch whether this tax momentum sustains as demand stabilises and global headwinds remain in play.
