Which of the following types of direct tax collection increased as of 10 February 2023 budget?

Correct — B. The CBDT statement for collections up to 10 February 2023 put gross direct tax collection at ₹15.67 lakh crore, 24.09% above the same point of the previous year.

Split by head, the gross growth was 29.63% for personal income tax (including securities transaction tax) against 19.33% for corporate income tax. Personal income tax is the faster-growing head, and that is what option (b) names.

Two of the four choices are not direct taxes at all, so the question really comes down to the two income-tax heads and their growth figures.

Why the others are wrong

• (a)
  Octroi duties — Octroi was a levy on goods entering a local area — an indirect tax collected by municipal bodies. The 101st Constitutional Amendment removed the State List entry that supported it, so it is not part of any direct-tax figure.
• (c)
  Commercial tax — Commercial tax is the label Indian states use for their sales tax, VAT and now GST administration. Those are indirect taxes on transactions, which a direct-tax collection statement does not cover.
• (d)
  Corporate tax — Corporate income tax is a genuine direct tax and its gross collection also rose — by 19.33% on the same date. That is the smaller of the two direct-tax growth rates in the same release, and the key marks personal income tax.

A direct tax is borne by the person it is levied on and cannot be passed down the chain. In India that means essentially two heads: corporate income tax and personal income tax.

An indirect tax is levied on a transaction and passed on in the price — GST, customs, and the older octroi, VAT and sales tax.

The Central Board of Direct Taxes publishes running collection figures through the year, gross and net of refunds, split between the two heads. Around Budget season those releases become current-affairs material, which is how a tax-administration statistic ends up in a General Awareness paper.

Key facts

• Gross direct tax collection up to 10 February 2023 was ₹15.67 lakh crore, 24.09% higher than a year earlier.
• Gross growth on that date was 29.63% for personal income tax including STT and 19.33% for corporate income tax.
• Net of refunds, direct tax collection stood at ₹12.98 lakh crore, 18.40% higher year on year.
• Octroi and state commercial tax are indirect taxes and appear in no direct-tax statement.

Common traps

• Treating anything with the word tax in its name as a direct tax.
• Choosing corporate tax because it is the more familiar head, without reading the growth figures.

No directly related past PYQ was found.