Net direct tax collection up 9% to Rs 10.82 trn till Sep 17 as refunds dip

Net direct tax collections grew 9.18% YoY to Rs 10.82 trillion till Sept 17 in FY26, driven by higher non-corporate tax inflows and lower refunds, while advance tax rose 2.9%

India’s net direct tax collection till September 17 in FY26 grew by 9.18 per cent to Rs 10.82 trillion from the previous year due to fewer refunds, according to government data released on Friday.

 

Of that amount, non-corporate tax grew by 13.67 per cent to Rs 5.83 trillion. The tax is paid by a specific set of entities that are not registered as companies under the Companies Act.

 

Net corporate tax grew by 4.93 per cent to Rs 4.72 trillion, while securities transactions tax (STT) increased 0.57 per cent to Rs 26,305.72 crore, according to data released by Central Board of Direct Taxes.

 

 

Gross direct tax collections increased by 3.39 per cent to Rs 12.43 trillion, while refunds dipped by 23.87 per cent to Rs 1.60 trillion. Corporate refunds — the majority of total refunds — grew by 13.13 per cent to Rs 1.23 trillion. Refunds issued to non-corporate taxpayers decreased by 63.39 per cent to Rs 37,306.72 crore.

 

Of total gross direct tax collected, corporate tax was Rs 5.95 trillion, non-corporate tax Rs 6.20 trillion , STT Rs 26,305.72 crore and other taxes stood at Rs 297.13 crore.

 

Samir Kanabar, partner at EY, said the government had frontloaded refunds in the first quarter of FY26, so a similar outgo cannot be expected in the second. The moderation in gross direct tax collections reflects weaker corporate profits and higher capital expenditure, which increased depreciation claims, he said.

 

Collections of advance tax, which is paid by individuals and businesses in four instalments in a year, grew by 2.90 per cent till September 17. Non-corporate advance tax collection decreased by 7.30 per cent to Rs 96,783.94 crore, while corporate advance tax rose by 6.11 per cent to Rs 3.52 trillion.

 

“The moderation in gross direct tax growth to 3.39 per cent can be attributed to two key factors: A slowdown in non-corporate advance tax payments, which declined by over 7 per cent and the base effect of strong collections in the previous year,” said Hitesh Sawhney, partner at PwC.

 

“While corporate advance tax has grown steadily, the muted growth in STT and significant contraction in refunds to non-corporates also point to uneven momentum across taxpayer categories,” he said.

 

It suggests that while the corporate sector is holding steady, consumption-linked and individual tax flows are under pressure, Sawhney added.

 

A reduction in individual income tax rates in FY26 led to non-corporate advance tax collections declining by around 7 per cent, said Vivek Jalan, partner at Tax Connect Advisory.

 

"Also on account of very strict monitoring of deductions in ITRs [Income Tax rates] this year, refunds are closely being scrutinised before release and hence the non-corporate refunds have almost dropped to one-third YoY," Jalan said.

 

The Centre is estimated to collect Rs 25.2 trillion in direct taxes in FY26. Net direct tax collection in FY25 grew at 13.57 per cent to Rs 22.26 trillion, exceeding the initial budgeted target of Rs 22.07 trillion.