India’s direct tax buoyancy remained above 1 for the third consecutive year, indicating that direct tax collections have been growing faster than the country’s nominal GDP. This reflects stronger tax compliance, improved reporting of income and widening of the tax base. A tax buoyancy of more than 1 means that a 1% rise in nominal GDP is associated with more than a 1% increase in tax revenue. The sustained buoyancy therefore points to continued growth in direct tax revenues and strengthening of the government’s revenue position. The trend has been supported by digitization of tax administration, data analytics, better information sharing and measures to improve voluntary compliance.