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Updated: July 11, 2025 20:24
India's net direct tax collection for FY26 (April 1-July 10) declined slightly by 1.3% year-on-year to Rs 5.6 trillion. The decline is due to a mix of factors including increased levels of refunds, relaxed personal tax slabs, and corporate capex-related deductions.
Key Takeaways
Gross collection of direct taxes grew 4.86% YoY to Rs 5.45 trillion
Net collections reduced due to 58% increase in refunds, which totaled Rs 86,385 crore
Corporate tax collection declined 5.13% YoY to Rs 1.72 trillion
Non-corporate tax (including personal income tax) rose by 0.71% to Rs 2.72 trillion
Securities Transaction Tax (STT) rose 12.13% to Rs 13,013 crore
Underlying Factors
Reduced tax slabs effective April 1, 2025, reduced TDS from salaried taxpayers
Capex allowances allowed under the Income Tax Act lowered taxable corporate profits
Advance tax growth slowed down to 3.87% YoY, from 27.34% in the same period last year
Corporate advance tax rose by 5.86%, while non-corporate advance tax fell by 2.68%
Market Sentiment & Outlook
Experts interpret the jump in refunds as an indication of greater processing efficiency
The Centre is working towards its FY26 target of Rs 25.2 trillion of net direct tax collections
Finance Ministry to review zone-wise trend in collections and litigation arrears next week
Sources: Economic Times, Business Standard, Financial Express, Press Information Bureau, EY India, Deloitte India
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