Direct Tax Revenue in FY26: Net Collections Cross ₹10.82 Lakh Cr

India’s direct tax revenue has shown healthy growth so far this year, exceeding ₹10.82 lakh crore as of September 17, 9% up from the same time a year ago. The rise has been driven mainly by stronger corporate advance tax collections and fewer refunds being issued.

Corporate tax collections so far are over ₹4.72 lakh crore, whereas non-corporate taxes (comprising individuals and HUFs) have collected around ₹5.84 lakh crore. Meanwhile, refund payments fell sharply by 24%, relieving pressure on net revenue. 

Collections from the Securities Transaction Tax (STT) have also been steady, adding more than ₹26,300 crore this year. With these additions, the government seems on course to achieve its ambitious FY26 direct tax target of ₹25.2 lakh crore.

Recent Years Results and Forecast – 2021-26

India’s direct tax revenue has been on a steady upward path over the past few years, reflecting a growing tax base:

• In FY 2021–22, net direct tax collections stood around ₹14.1 lakh crore.
• By FY 2022–23, collections had risen to almost ₹16.6 lakh crore, reflecting healthy double-digit growth.
• In FY 2023–24, the number rose further to ₹19.6 lakh crore, reflecting a strong pickup in corporate as well as individual taxes.
• For the fiscal year 2025–26, the government has a goal of ₹25.2 lakh crore, an expected rise of some 12.7% over last year.

The government has already collected ₹10.82 lakh crore in direct taxes by mid-September 2025, putting it slightly ahead of its target. Therefore, to stay on track, this momentum must carry through the second half of the year. 

Tax Collection Detailed Breakdown

The increase in direct tax revenue has come from different sources, contributing to India’s tax base:

• Corporate Tax: Net corporate tax collections have surpassed ₹4.72 lakh crore, up from ₹4.50 lakh crore in the corresponding period last year. Of this, advance tax deposits such as the instalments, corporates deposit ahead of their annual liability increased by 6.1%, reaching ₹3.52 lakh crore. 

However, it is a reflection of improved profitability for most firms and consistent compliance from corporates.

• Non-Corporate Tax (Individuals & HUFs): Tax paid by individuals and Hindu Undivided Families (HUFs) also increased. The collection was ₹5.84 lakh crore, from ₹5.13 lakh crore in the previous year. 

Therefore, this increase signifies higher incomes and improved tax compliance among non-corporate entities, which constitute a significant portion of India’s tax base.

• Securities Transaction Tax (STT): So far, ₹26,306 crore has been collected, slightly higher than the ₹26,154 crore collected in the same period last year. 

Therefore, shows that equity market participation remains strong, even amid market volatility.

• Refunds: The government issued ₹1.61 lakh crore in refunds between April and September 17, which is 24% lower than last year. 

While this has improved the net tax number, it also suggests fewer overpayments being returned to taxpayers.

End Note

What is notable this year is not just the collections but also the effectiveness of the system in managing high volumes within shorter timeframes. Looking forward as policymakers, the actual potential is in continuing this momentum and simplifying and making tax procedures more predictable for both individuals and businesses.

If well-managed, this transformation could build confidence in India’s fiscal system and underpin long-term growth, rather than merely achieving annual targets.

Source: MoneyControl

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