Direct tax collection after refunds recorded an year-on-year growth of 9.4% till February 10 of the current financial year, compared with a projected growth target of 9% (revised estimates) over FY25. The collections reached at Rs 19.43 lakh crore, 80.2% of the FY26 target of Rs 24.21 lakh crore (revised estimates).
The corporate tax collection was Rs 8.89 lakh crore and the non-corporate tax collection was Rs 10.03 lakh crore. The non-corporate tax includes taxes paid by individuals, HUFs, firms, local authorities, artificial juridical persons, etc.
Corporate tax receipts after refunds rose by 14.5% against the projected growth rate of 12.4% (revised estimates), while personal income tax (PIT) collections grew by 5.9% against the revised target of 6.2% for FY26. In FY26 Budget estimates, the government had pegged a far more ambitious target of 21.6% for the PIT collection for the current financial year.
According to data released by the Income Tax Department, direct tax collection before refunds grew by 4.09% to Rs 22.78 lakh crore. Refunds declined by 18.82% to Rs 3.34 lakh crore till February 10. Central Board of Direct Taxes Chairman Ravi Agarwal had earlier told FE that the decline in refunds is mainly due to the shift of taxpayers to the new regime, which involves fewer deduction claims, and the identification of incorrect refund claims. He also stated that a compliance campaign during November–December encouraged taxpayers to review and revise returns. This helped reduce erroneous claims by about ₹1,750 crore over two years, he had said.
Rohinton Sidhwa, Partner at Deloitte India, said that “it is only the hold back of refunds that supports the higher net (after refund) tax collection over previous years.” He said that both corporate and non-corporate taxes are showing flat growth over the previous year. It’s important to note that there is usually a surge of tax collections in March which may still help the government meet the revised estimate targets, he said. The slowdown is partly attributed to major tax relief measures in the FY26 Budget, including raising the exemption limit under the new regime to Rs 12 lakh from Rs 7 lakh and reducing rates across slabs. The government has projected nominal GDP growth at 8% for FY26.