Net direct tax collections rose 8% to ₹17.04 trn until December 17

Net direct mopup growth lags Budget goal

The Centre’s net direct tax collections grew 8 per cent till December 17 in 2025-26 (FY26) to ₹17.04 trillion, lower than 12.6 per cent growth assumed in the FY26 Budget, according to provisional data released by the Central Board of Direct Taxes (CBDT).

 

This is despite 13.5 per cent or ₹46,430 crore less refunds compared to the same period in FY25. The largest dip in refunds (24.2 per cent) was in non-corporate tax that includes personal income tax (PIT) payers while corporate tax refunds dipped 4.4 per cent during the same period.

 

Gross direct tax collections during April 1-December 17 period rose 4.16 per cent to ₹2 trillion.

 

The Centre has budgeted ₹25.2 trillion in net direct tax collection for FY26, and it has achieved 67.6 per cent of the target till December 17. In FY25, net direct taxes had risen 13.6 per cent to ₹22.26 trillion, surpassing the Budget Estimate (BE).

 

Net corporate tax collection rose 10.5 per cent to ₹8.17 trillion while non-corporate tax collection — paid by individuals, Hindu undivided families (HUFs), firms, association of persons (AOPs), body of individuals (BOIs), and other entities — increased 6.4 per cent to ₹8.47 trillion. Securities transaction tax (STT) contributed ₹40,195 crore, marginally (0.2 per cent) higher than the same period the preceding year, reflecting lacklustre equity market turnover.

 

Rohinton Sidhwa, partner, Deloitte India, said tax refunds issuance has dropped much below last year numbers while overall tax collection has grown marginally. “The drop in refunds is being attributed to a higher amount of screening of any fraudulent refund claims. Holding back refunds also accelerates litigation that the tax department can ill afford,” Sidhwa said.

 

Advance tax collections as of December 17 in FY26 rose 4.27 per cent, with advance corporate tax collections rising 7.98 per cent, while non-corporate advance tax collections dipped 6.49 per cent during the same period.

 

“Overall, the corporate advance tax increase signals good corporate earnings. Non-corporate advance tax collections have, however, declined possibly on the back of rate cuts for individuals given in the previous Budget,” Sidhwa added.

 

CBDT Chairman Ravi Agarwal last month said he was confident of achieving the direct tax collection target of ₹25.2 trillion for FY26. Agarwal said the department has also begun reviewing cases where income tax refunds were claimed incorrectly, leading to a temporary halt in payouts until the checks are completed. The verification exercise is expected to be finished by the end of December.

 

Agarwal said the dip in refund numbers reflects fewer refund claims filed this year and some incorrect claims currently under reassessment.

 

Aditi Nayar, chief economist, Icra Ltd, said a pickup in refunds would weigh on the growth in net non-corporate tax collections in the remaining part of the financial year. “Overall, Icra expects a sizable miss in PIT collections relative to the FY26 Budget target of ₹13.6 trillion, which entails a 15 per cent growth over the FY25 provisional number, whereas corporate tax collections are likely to broadly meet the FY26BE. Higher dividends are likely to help offset a portion of the miss in tax collections in FY26," she added.

 

Aakash Uppal, partner & leader - direct tax at BDO India, said the data suggests that while the economy remains stable, the pace of tax collections could vary depending on the performance of key sectors, particularly in the context of evolving US tariff policies and the proposed India-US trade deal.