Net direct tax collection falls nearly 4% to ₹6.64 lakh crore so far in FY26 on higher refunds

Net direct tax collection has declined by 3.95% to ₹6.64 lakh crore so far in the current fiscal year due to higher refunds, government data showed on Tuesday, August 12. Direct tax includes taxes on income paid by companies, individuals, professionals and other entities.

Between April 1 and August 11, refunds issued jumped 10% to ₹1.35 lakh crore, as per data released by the Central Board of Direct Taxes (CBDT). 

Net corporate tax collection jumped 3% to nearly ₹2.29 lakh crore, while non-corporate tax mop-up dipped 7.45% to ₹4.12 lakh crore. Non-corporate tax includes tax paid by individuals, Hindu Undivided Families (HUFs) and firms. Further, Securities Transaction Tax (STT) net collection was ₹22,362 crore between April 1 and August 11.

Overall, total net collections stood at nearly ₹6.64 lakh crore, down 3.95% from ₹6.91 lakh crore collected in the year-ago period. Gross collections (before refunds) stood at ₹7.99 lakh crore between April 1 and August 11, down 1.87% from ₹8.14 lakh crore in the same period last year. 

The drop in the net collections is mainly because of the higher volume of refunds issued, especially for the corporate tax, a PTI report said, quoting Price Waterhouse & Co LLP Partner Hitesh Sawhney. 

The direct tax collections seem to have been dampened by high refunds of corporation tax collections and a later deadline for personal income tax return filings, the report stated, quoting ICRA Chief Economist Aditi Nayar. 

"The available data on 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. 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," Nayar said, as per the report. 

In the current fiscal (2025-26), the government has forecasted its direct tax collection at ₹25.20 lakh crore, up 12.7% year-on-year (YoY). The government is aiming to collect ₹78,000 crore from STT in FY26.