India’s net direct tax collections declined 3.95% year-on-year to Rs 6.64 trillion in the period from April 1 to August 11, data from the Income Tax Department showed on Tuesday.
This decline was largely due to a rise in tax refunds issued during the period.
Meanwhile, on a gross basis, before accounting for refunds, direct tax collections stood at Rs 7.99 lakh crore—a 1.87% drop from Rs 8.14 lakh crore collected during the same period last year.
"The tepid performance of advance tax collections seems to have been dampened by high refunds of corporation tax collections and a later deadline for personal income tax filings. The available data on advance tax collections suggests that the GoI’s personal income tax and corporation tax collections are required to record a high double-digit growth in the remaining part of FY2026, to meet their respective FY2026 targets," said Aditi Nayar, Chief Economist, ICRA Ltd.
"While this may seem challenging, the growth rates in net PIT and CT collections are likely to improve as the year progresses, and the base normalises," she added.
Tax refunds issued so far in this fiscal year rose by 9.81% to Rs 1.35 lakh crore. Gross direct tax collections (before deducting refunds) stood at Rs 7.99 lakh crore between April 1 and August 11, reflecting a 1.87% decrease from Rs 8.14 lakh crore in the corresponding period of the previous year.
For the full fiscal year 2025-26, the government has set a direct tax collection target of Rs 25.20 lakh crore, aiming for a 12.7% increase over the previous year. The government also plans to raise Rs 78,000 crore from STT in the current fiscal.
This decline was largely due to a rise in tax refunds issued during the period.
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Meanwhile, on a gross basis, before accounting for refunds, direct tax collections stood at Rs 7.99 lakh crore—a 1.87% drop from Rs 8.14 lakh crore collected during the same period last year.
"The tepid performance of advance tax collections seems to have been dampened by high refunds of corporation tax collections and a later deadline for personal income tax filings. The available data on advance tax collections suggests that the GoI’s personal income tax and corporation tax collections are required to record a high double-digit growth in the remaining part of FY2026, to meet their respective FY2026 targets," said Aditi Nayar, Chief Economist, ICRA Ltd.
"While this may seem challenging, the growth rates in net PIT and CT collections are likely to improve as the year progresses, and the base normalises," she added.
Tax refunds issued so far in this fiscal year rose by 9.81% to Rs 1.35 lakh crore. Gross direct tax collections (before deducting refunds) stood at Rs 7.99 lakh crore between April 1 and August 11, reflecting a 1.87% decrease from Rs 8.14 lakh crore in the corresponding period of the previous year.
For the full fiscal year 2025-26, the government has set a direct tax collection target of Rs 25.20 lakh crore, aiming for a 12.7% increase over the previous year. The government also plans to raise Rs 78,000 crore from STT in the current fiscal.
