This study explores how digitalization has influenced direct and indirect tax collection in India. Over the past few years, the Government of India has introduced several digital initiatives such as GST, e-filing systems, and digital payment platforms to modernize the taxation system. These reforms have played a significant role in making tax administration more efficient, transparent, and accessible.

The study is based on secondary data collected from government reports, official publications, and academic sources. The findings suggest that digitalization has helped reduce manual errors, curb tax evasion, widen the tax base, and enable real-time tracking of financial transactions. It has also simplified the tax filing process, making it quicker and more convenient for taxpayers.

At the same time, certain challenges still remain. Issues like technical glitches, cybersecurity concerns, lack of digital literacy, and inadequate infrastructure can limit the full potential of digital systems.

Overall, the study concludes that digitalization has brought a positive transformation in India’s taxation system and has supported economic growth. However, continued efforts in improving infrastructure, spreading awareness, and strengthening policies are necessary to make the system more effective.

Keywords: Digitalization, GST, E-filing, Tax Compliance, Direct Tax, Indirect Tax, Revenue Collection, Transparency, India.