“Tax terrorism” – that’s how the opposition described the government’s growing dependence on personal income tax (PIT) from the salaried middle class earlier this year. While the phrase may sound a bit provocative, it points to a deeper structural change. For the first time since Independence, PIT collections have overtaken corporate income tax (CIT). This isn’t just a one-time statistical anomaly, but marks a long-term shift where the tax burden is moving from corporate profits to individual salaries and the poorer strata.
https://thewire.in/economy/indias-unequal-tax-structure-the-rich-pay-less-the-rest-get-less
In 2023-24, PIT made up a larger share of direct tax revenue than CIT. More importantly, PIT is growing much faster than CIT when measured against GDP growth (tax buoyancy). While middle-income earners are paying more in taxes, corporate profits and personal wealth of the rich continue to benefit from relatively light taxation through lower rates, exemptions and incentives.
Over the last decade, India’s tax regime has tilted in favour of corporates and indirect taxes. Corporate tax rates fell from 30% to 22% for domestic firms and to 15% for new manufacturers, yet collections declined from 3.5% to 2.8% of the GDP. Meanwhile, the GST revenue more than doubled from Rs 4.4 lakh crore to Rs 22.08 lakh crore in the last 5 years, with year-on-year growth of 9.4%.
by Pranay Raj
30/07/2025