The government has foregone nearly ₹99,000 crore in revenue during fiscal year 2023-24 due to tax incentives provided to corporates, Minister of State for Finance Pankaj Chaudhary said on Tuesday.
In a written reply at the Rajya Sabha, the Minister provided estimates of the revenue lost due to tax incentives, including various corporate tax deductions between FY 2019-20 and 2023-24. In 2023-24, the government waived ₹98,999 crore tax revenue, as compared to ₹88,109 crore in 2022-23 and ₹96,892 crore in 2021-22.
The Net Corporate Tax collection (provisional) in FY 2023- 24 stood at Rs 9.11 lakh crore and has shown a growth of 10.26% over the net corporate tax collection of Rs 8.26 lakh crore in the preceding year. In FY 2021-22, the net corporate tax collection stood at Rs 7.12 lakh crore as compared to Rs 6.21 lakh crore in FY 2020-21.
The total amount of corporate tax revenue foregone in the fiscal years 2020-21 and 2019-20 was ₹75,218 crore and ₹8,043 crore, respectively.
The data on corporate tax revenue foregone was shared in response to a question from AAP MP Raghav Chadha on the estimated loss to the exchequer due to the corporate tax reductions from 2019-20 to 2024-25.
Chaudhary further stated that the estimated revenue foregone for the financial year 2024-25 till date is not available.
Corporate tax rates have gradually decreased since 2016, even as exemptions and incentives are phased out.
According to the Finance Act, 2016, corporate tax rates were lowered to 29% of total income with the aim to encourage growth, increase investment and generate more employment. In the following year, i.e., in 2017, it was lowered to 25 per cent of total income aiming to benefit smaller domestic companies with an annual turnover of ₹50 crores to make it more attractive for firms to adopt a company structure.
Again in September 2019, the government announced a reduction in the base corporate tax rate, bringing it down to 22 per cent from 30 per cent for existing companies. For new manufacturing firms incorporated after October 1, 2019, the rate was decreased to 15 per cent from 25 per cent, on the condition that they forgo all exemptions and incentives.
However, under the Finance Act, 2024, tax rates on the income of foreign companies, apart from those charged at special rates, have been reduced from 40 per cent to 35 per cent, in order to encourage investment and employment.
As per media reports, between April 1 and June 19, 2025, corporate tax collection witnessed a slowdown at about Rs 1.73 lakh crore, a decline of over 5 per cent year on year.
