Determinants of Direct Tax in India: A Systematic Review

Abstract

Tax revenue constitutes a vital source of income for governments worldwide, and India is no exception, with more than three-fourths of the Government of India's total receipts originating from tax revenue, as reported in the Annual Financial Statement for the fiscal year 2019-20. In light of this significant reliance on tax revenue, this study aims to conduct a comprehensive review of existing literature on direct taxes and the various factors influencing their collection. The objective is to offer valuable insights and a roadmap for future researchers, policymakers, and government entities.

The study elucidates the importance of tax revenue and its impact on fiscal stability and development. Through a systematic review, relevant research papers are extracted from the SCOPUS database, ensuring a comprehensive coverage of the subject matter. These papers are critically analysed to identify the key determinants affecting the collection of direct taxes in India. Key factors explored include economic growth, tax policy reforms, taxpayer compliance behaviour, administrative efficiency, and external influences such as global economic trends. Additionally, the study addresses the interplay between direct tax revenue and social, political, and environmental factors.

By synthesizing and organizing the findings from diverse research sources, this study not only provides an up-to-date understanding of the factors influencing direct tax revenue in India but also serves as a valuable resource for policymakers and government officials in formulating effective tax policies and revenue enhancement strategies. Furthermore, it identifies research gaps and areas warranting further investigation, fostering an informed and evidence-based approach to tax governance in India