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Informist, Monday, May 4, 2026

 

--Govt: FY26 gross direct tax collection INR 28.119 tln, up 4.03%

--Govt: FY26 net direct tax collection INR 23.404 tln, up 5.1%

--Govt: FY26 direct tax refunds INR 4.715 tln, down 1.1%

--Govt: FY26 net corporate tax collection INR 10.992 tln, up 11.4%

--Govt: FY26 STT collection INR 575.22 bln, up 7.9%

--Govt misses FY26 revised direct tax collection aim by INR 810 bln

 

NEW DELHI – The government's net direct tax collections in 2025-26 (Apr-Mar) rose 5.1% on year to INR 23.404 trillion, missing the revised Budget target by INR 810 billion, data released by the finance ministry on Monday showed. The Budget for FY27 had lowered the direct tax collection target for FY26 by INR 990 billion from the original Budget estimate of INR 25.20 trillion.

 

The lacklustre collection of direct taxes came as FY26 marked the first year of Finance Minister Nirmala Sitharaman's direct tax bonanza announced in the FY26 Budget. She had hiked the tax rebate limit to INR 1.2 million, effectively meaning that individuals with income of up to INR 1.2 million per annum would be exempted from paying any income tax. The move was aimed at increasing disposable income in the hands of taxpayers to spur demand. The changes in income tax would result in revenue loss of INR 1 trillion per annum, Sitharaman had said at the time of announcing the tax bonanza. 

 

Based on the government's revised estimates, direct taxe collections were estimated to grow 9% on year in FY26, nearly double the pace of growth it registered. Gross direct tax collections in FY26 were INR 28.12 trillion, up just 4%. Refunds fell 1.1% during the year to INR 4.72 trillion. The government expects total tax collections in FY26 to be INR 40.78 trillion, up 7.4% on year. The revised estimate for total tax collections is INR 1.9 trillion below the Budget estimate for FY26. 

 

Net corporate tax collections rose 11.4% on year to INR 10.99 trillion in FY26, INR 100 billion lower than the revised aim. Non-corporate tax collections, meanwhile, were flat on year at INR 11.83 billion. Non-corporate tax includes taxes paid by individuals, Hindu Undivided Families, firms, associations of persons, bodies of individuals, local authorities, and artificial juridical persons.  

 

The government collected INR 575.22 billion in securities transaction tax in FY26, up 7.9% on year, missing the target by INR 61.50 billion. 

 

For FY27, the government projected direct tax collections to grow 11.4% on year to INR 26.97 trillion. However, since the government missed the Budget target in FY26, collections will now have to grow at a higher rate of 15.3% to meet the FY27 aim. The Budget had projected corporate tax collections to grow 11% to INR 12.31 trillion in FY27. However, corporate tax collections will now have to grow 12% to meet the FY27 aim. 

 

The Central Board of Direct Taxes has discontinued the practice of giving data on personal income tax collections every month, but a majority of non-corporate tax collections are made up of personal income tax collections. The Budget had projected personal income tax collections to grow 11.7% to INR 14.66 trillion in FY27. To meet this aim, collections will now have to grow a whopping 24% on year.  End

 

Reported by Priyasmita Dutta

Edited by Avishek Dutta

 

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