From GST Overhaul To Tax Relief: Latest Data Shows How PM Modi’s Tax Policies Are Driving Change

As Prime Minister Narendra Modi turns 75 tomorrow, his decade-long economic reforms stand out as a defining legacy. From overhauling India’s indirect tax system with GST to slashing corporate tax rates and digitising direct tax compliance, his policies have fundamentally reshaped the economy.

Recent data from 2024-25 shows these policies are bearing fruit in measurable ways.

Record GST Collections & Simplified Tax Structure

One of the biggest indirect tax successes under the Modi government has been in GST (Goods & Services Tax). In FY2024-25, India’s gross GST collections hit a record Rs 22.08 lakh crore, rising by about 9.4% year-on-year.  This reflects both the growing formalisation of the economy and improved compliance.

In individual months, recent figures also show strong momentum. In August 2025, GST collections were Rs 1.86 lakh crore, up 6.5% compared with August last year.

In May 2025, there was a sharper rise: collections reached about Rs 2.01 lakh crore, growing 16.4% year-on-year.

On the structural side, major recent reforms are simplifying the GST rate slabs. In a move announced in 2025, the government is phasing out the 12% and 28% slabs, bringing many goods previously taxed at those rates down to 5%, as part of “GST 2.0.”  

This is expected to reduce costs for consumers and ease compliance burdens for businesses.

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Corporate Tax Cuts and Incentives Still Anchoring Growth

India’s corporate tax policies have also been overhauled to encourage investment. The concessional rate of 22% for existing domestic companies (with certain conditions), and 15% for new manufacturing firms, remains a key pillar.  These rates are part of the earlier reforms but continue to influence investment decisions.

In addition, the Finance Act of 2024 introduced changes such as a reduced tax rate for foreign companies (lowered from 40% to 35%), which makes India more competitive for international businesses.

Recent Budget Adjustments for Individuals

On the personal income tax front, there have been recent changes making life easier for salaried individuals. As per the Union Budget 2025-26, no income tax will be paid on income up to Rs 12 lakh, under the new regime (which, after accounting for standard deduction, becomes Rs 12.75 lakh).

The standard deduction was increased to Rs 75,000. The tax slabs for incomes above that have been adjusted as well, giving relief to lower and middle-income earners.

New Income Tax Act

On August 12, 2025, Parliament passed the new Income Tax Bill, 2025, replacing the six-decade-old Income Tax Act of 1961, which will take effect from April 1, 2026. Finance Minister Nirmala Sitharaman clarified that the Bill does not change tax rates but simplifies the law by removing redundant provisions and archaic language.

The new law reduces the number of sections from 819 to 536, chapters from 47 to 23, and cuts the word count nearly in half while introducing 39 tables and 40 formulas to make the rules easier to understand.

Drafted in a record six months with over 75,000 person-hours of effort, the Bill also includes the Taxation Laws (Amendment) Bill, 2025, which updates block assessment rules for search cases and provides tax benefits to Saudi Arabia’s public investment funds.

Additionally, the government has confirmed that all tax benefits under the New Pension Scheme (NPS) will now also apply to the Unified Pension Scheme (UPS), effective April 1, 2025.