Corporate tax collection fell below personal income tax collection for the first time in 12 years due to lower tax rates and the COVID-19 impact on businesses. The corporate income tax collection for FY21 stood at Rs 4.57 lakh crore, while total personal income tax was at Rs 4.69 lakh crore. Corporate tax is charged from corporations or companies, while personal income tax is levied on individual incomes.
Both corporate and personal income tax collections shrunk in the financial year 2020-21 by 18 percent and 2.3 per cent, respectively, data from the Controller General of Accounts suggest. The Modi government in September 2019 had slashed corporate tax rates by around 10 percentage points. New corporate tax rates for existing companies stand at 25 percent while for new ones in manufacturing, it’s 17 percent.