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RAS question

In India, the largest source of tax revenue for the Central Government is:

Correct answer: (D) Income Tax.

In India, Income Tax is the largest listed source of tax revenue for the Central Government among these options, based on 2024-25 actual gross tax receipts in the Union Receipt Budget 2026-27.

  1. (A)

    Customs Duty

  2. (B)

    Excise Duty

  3. (C)

    GST

  4. (D)

    Income Tax

Explanation

Union Receipt Budget 2026-27, Annexure-2 lists gross tax revenue by head and shows that, in 2024-25 actuals, Taxes on Income other than Corporation Tax stood at ₹12,35,171 crore. This is higher than Goods and Services Tax at ₹10,27,041 crore and Corporation Tax at ₹9,86,767 crore. Among the options given in the MCQ, that makes Income Tax the largest single listed source of central gross tax receipts. The point is important because an older broad claim that GST is now the largest central tax source does not hold when checked against the official 2024-25 actual figures in the Receipt Budget.

Why the other options are wrong

  • (A) Customs Duty is wrong because Annexure-2 records Customs at ₹2,33,201 crore in 2024-25 actuals, far below Income Tax at ₹12,35,171 crore.
  • (B) Excise Duty is wrong because Union Excise Duties were ₹3,00,253 crore in 2024-25 actuals, and excise has also been largely subsumed into GST since 2017.
  • (C) GST is wrong because the official 2024-25 actual GST figure of ₹10,27,041 crore is lower than Taxes on Income other than Corporation Tax at ₹12,35,171 crore.

Concept

This tests the Indian Economy syllabus area of Union government receipts and the composition of gross tax revenue. It recurs in RAS because Budget tables often overturn common memory-based assumptions about which tax head is currently dominant.

Source

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