Lok Sabha Question No. 2494 (UNSTARRED), answered on 2025-08-04
Subject: Impact of Corporate Tax Reduction
Ministry: FINANCE
Asked by: Shri Shashank Mani

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA

## UNSTARRED QUESTION NO. 2494

TO BE ANSWERED ON MONDAY, AUGUST 04, 2025/SRAVANA 13, 1947 (SAKA)

## IMPACT OF CORPORATE TAX REDUCTION

2494. SHRI SHASHANK MANI:

Will the Minister of FINANCE be pleased to state:

- (a) whether there has been an overall increase in tax collections following the reduction in corporate tax rates;
- (b) if so, the details thereof including data on tax revenue growth, year-wise;
- (c) whether the Government is considering specific incentives to attract more international corporations, such as Apple and Google, to establish manufacturing unit in the country;
- (d) if so, the details thereof;
- (e) whether these initiatives are expected to impact tax revenue and economic growth; and
- (f) if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) & (b) Yes. There has been an overall increase in direct tax collections after reduction of the  corporate  tax  rates  with  effect  from  AY  2020-21  (except  in  FY  2020-21  being  covid affected year). The year-wise details of the net direct tax collection in the last five years are as under:

(Rs. In Crore)

| Financial Year   | Net Direct Tax Collection   | %Growth as compared to previous year   |
|------------------|-----------------------------|----------------------------------------|
| 2019-20          | 10,50,681                   | -7.65%                                 |
| 2020-21          | 9,47,176 #                  | -9.85%                                 |
| 2021-22          | 14,12,422                   | 49.12%                                 |
| 2022-23          | 16,63,686                   | 17.79%                                 |
| 2023-24          | 19,60,166                   | 17.82%                                 |
| 2024-25          | 22,26,375*                  | 13.58%                                 |

Source: Pr. CCA (CBDT)

#Covid affected Year

*Provisional

(c) to (f) In  order  to  create  a  globally  competitive  business  environment  for  domestic companies, attract fresh  investment and create  employment opportunities, section 115BAA and section 115BAB were introduced in Income-tax Act through Taxation Laws (Amendment) Act, 2019. The impact of section 115BAB is reflected in a significant growth of new manufacturing companies from 2,928 in AY 2022-23 to 7,185 in AY 2024-25.

To encourage start-ups, initiatives taken have resulted into an increase in the number of startups claiming deduction under section 80IAC from 328 in AY 2022-23 to 877 in AY 2024-25. Further, the number of companies covered under section 80JJAA in respect of employment of new employees has increased from 2,838 in AY 2022-23 to 3,644 in AY 2024-25.

The  specific  incentives  are  provided  in  the  Income-tax  Act  through  Finance  Bill.  The initiatives taken have led to generation of employment, increase in tax revenue and overall economic growth.

The total revenue impact on account of tax benefits extended to companies was Rs. 88,109 .27 Crores  and  Rs.  98,999.57  Crores  (projected)  in  FY  2022 -23  and  FY  2023 -24  respectively ( Source:  Receipt  Budget  2025-26).  The  above  tax  benefits  have  the  impact  of  making  the corporates competitive and encouraging investment and therefore economic growth.

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