India's net collection of direct taxes so far this fiscal year fell nearly 4% from a year earlier, as tax cuts, large refunds and an extended deadline to file returns weighed.
Government officials said there was no cause for worry as they expect collections to pick up from next month and meet the projections for the fiscal year. Economists also expect the numbers to improve as the year progresses.
Direct tax collections net of refunds fell to ₹6.64 lakh crore between April and August 11 from ₹6.91 lakh crore a year earlier, according to data released by the Central Board of Direct Taxes on Tuesday. Net collection of corporate tax grew about 2.3%, but non-corporate tax, including income tax, fell 7.4%. Gross direct tax collections fell nearly 2% from a year earlier to ₹7.99 lakh crore.
The income tax department issued refunds of ₹1.35 lakh crore in this period, up 10% from the previous fiscal year, the data showed.The government has projected a near 13% increase in direct tax revenue for FY26 at ₹25.2 lakh crore.
Net corporate tax collections were ₹2.29 lakh crore. Net non-corporate tax collections, which include collections from individuals, Hindu Undivided families and firms, totalled ₹4.12 lakh crore.
The government had announced a cut in personal income tax in the February budget. It also extended the last date for filing income tax returns to September 15 from the usual July 31. Because of the extended deadline, many taxpayers have not yet paid their income taxes or filed returns. These numbers are now expected to reflect in the collections in the coming months.
"It is too early to jump to any conclusion ... A clear picture on the collection trend will emerge only at the end of second quarter," a senior official told ET, adding that the government is confident of meeting FY26 direct tax targets "comfortably". The official said collections should pick up September onwards.
Experts also have similar views.
"...the growth rates in net personal income tax and corporate tax collections are likely to improve as the year progresses, and the base normalises," said Aditi Nayar, chief economist at ratings firm ICRA. Nayar said both personal and corporate tax would be required to grow in high double digits in the remaining part of FY2026 to meet the FY2026 targets.
Securities transaction tax (STT) mop-up was ₹22,362 crore between April and August 11, up 2.3% from ₹21,599 crore a year earlier. The government aims to collect ₹78,000 crore in STT in the current financial year.
Government officials said there was no cause for worry as they expect collections to pick up from next month and meet the projections for the fiscal year. Economists also expect the numbers to improve as the year progresses.
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Direct tax collections net of refunds fell to ₹6.64 lakh crore between April and August 11 from ₹6.91 lakh crore a year earlier, according to data released by the Central Board of Direct Taxes on Tuesday. Net collection of corporate tax grew about 2.3%, but non-corporate tax, including income tax, fell 7.4%. Gross direct tax collections fell nearly 2% from a year earlier to ₹7.99 lakh crore.
The income tax department issued refunds of ₹1.35 lakh crore in this period, up 10% from the previous fiscal year, the data showed.The government has projected a near 13% increase in direct tax revenue for FY26 at ₹25.2 lakh crore.
Net corporate tax collections were ₹2.29 lakh crore. Net non-corporate tax collections, which include collections from individuals, Hindu Undivided families and firms, totalled ₹4.12 lakh crore.
The government had announced a cut in personal income tax in the February budget. It also extended the last date for filing income tax returns to September 15 from the usual July 31. Because of the extended deadline, many taxpayers have not yet paid their income taxes or filed returns. These numbers are now expected to reflect in the collections in the coming months.
"It is too early to jump to any conclusion ... A clear picture on the collection trend will emerge only at the end of second quarter," a senior official told ET, adding that the government is confident of meeting FY26 direct tax targets "comfortably". The official said collections should pick up September onwards.
Experts also have similar views.
"...the growth rates in net personal income tax and corporate tax collections are likely to improve as the year progresses, and the base normalises," said Aditi Nayar, chief economist at ratings firm ICRA. Nayar said both personal and corporate tax would be required to grow in high double digits in the remaining part of FY2026 to meet the FY2026 targets.
Securities transaction tax (STT) mop-up was ₹22,362 crore between April and August 11, up 2.3% from ₹21,599 crore a year earlier. The government aims to collect ₹78,000 crore in STT in the current financial year.
