The Union government appears poised to meet or even surpass the revised estimate for gross tax revenues (GTR) for the current financial year, going by the data till January-end.
Collections for the April-January period showed positive momentum, with GTR registering an impressive 8.6% year-on-year (YoY) growth. This places the government in a comfortable position, as only a modest 2.95% YoY growth is required over the remaining two months (February-March) to achieve the RE for FY26.
Gross tax collections till January stood at 32.41 lakh crore against the revised full-year target of40.77 lakh crore. The overall projected growth for FY26 now stands at 7.4% YoY, after the downward revision presented in the Union Budget for FY27. However, the Budget Estimates for FY26 had projected over 12% YoY growth in GTR for the current financial year.
Net tax revenue
Net tax revenue, the amount retained by the Centre after devolution to states, has performed even more strongly, recording 10% YoY growth through January. Despite a full-year projection of 7% YoY and a slightly negative required run-rate of -2.7% YoY in the remaining two months, the healthy pace so far suggests minimal risk of any shortfall.
Net tax collections stood at 20.94 lakh crore till January, against the revised full-year target of26.74 lakh crore.
As per the data, corporate tax has emerged as a standout performer, posting 14.7% YoY growth through January and a projected full-year increase of 12.4% YoY.
This robust contribution from the corporate sector provides a crucial buffer, even as personal income tax (excluding Securities Transaction Tax) has remained relatively subdued at 4.9% through January, a reflection of the significant tax relief measures introduced in recent budgets to boost household consumption.
Income tax collection
The income tax collection was `9.57 lakh crore till January and the revised full year target is 13.12 lakh crore.
Customs duty collections surprised on the upside, surging 15.5% YoY cumulatively through January, with a full-year projection of 10.8% YoY. The required rate for the Customs duty collection target is -10.2% YoY for the remaining two months.
Excise duty has also grown steadily at 10% YoY through the first ten months, while the Central Goods and Services Tax (CGST) has expanded at a more moderate 6.1% YoY pace.
The strong partial-year numbers, with net tax receipts reportedly reaching roughly 78% of the revised estimate target by the end of January, indicate that the government faces little pressure in the final quarter.
According to data, excise duty and income tax are the only heads where the required growth rate in the remaining two months is higher than the projected growth.
Gaura Sen Gupta, Chief Economist at IDFC First Bank, expects the government to meet the revised FY26 gross tac collection target.
“We see some upside risk on excise duty collection due to strong collection on petrol and diesel. On top of this, the government has two months of the additional excise duty on tobacco products and the health security cess on pan masala products,” Sen Gupta said.
The comfortable revenue run-rate is widely seen as a positive signal ahead of the next budget cycle, where the government has pegged a gross tax revenue growth of 8% over the FY26 revised estimates.