The government has so far seen strong direct tax collections in the ongoing financial year. From the beginning of the financial year 2025-26 (FY26) to September 17, net direct tax collections rose by 9.18% to Rs 10.82 lakh crore. This rise in collections is primarily due to a growth in advance tax collected from companies and the slower pace of refund issuance.
Tax refunds drop by 24% over the same period last year
Between April 1 and September 17, 2025, the government issued income tax refunds of only Rs 1.61 lakh crore. This is a 24% drop from last year’s Rs 2.1 lakh crore.
Reacting to the lower refunds this year, many people on social media are asking questions about their ITR refund status and are concerned about income tax refund delays.
Corporate tax collections strong, individuals also paid more
Tax collections from companies remained steady. Corporate advance tax collections rose 6.11% to Rs 3.52 lakh crore. Net corporate tax collections stood at Rs 4.72 lakh crore as compared to Rs 4.50 lakh crore last year.
Individuals and HUFs also paid more taxes this time. Non-corporate tax mop-up reached Rs 5.84 lakh crore as againstRs 5.13 lakh crore last year.
Securities Transaction Tax (STT) almost flat
Securities Transaction Tax collections from the stock market remained almost flat. The government received Rs 26,306 crore this year against Rs 26,154 crore last year.
Net direct tax collections jump 9.18%
Overall, the government’s net direct tax collections increased by 9.18% to Rs 10.82 lakh crore in FY26. Excluding refunds, gross direct tax collections totaled Rs 12.43 lakh crore, an increase of only 3.39% from last year.
Government’s tax target
The central government has set a direct tax collection target of Rs 25.20 lakh crore for this fiscal year (2025-26). This is a 12.7% increase from last year. Additionally, it aims to collect approximately Rs 78,000 crore from STT.
Refunds delay biggest concern for taxpayers
With the Income Tax Department deciding to close the window for ITR filing by taxpayers in the non-audit category on September 16, return filers are now eagerly awaiting their tax refund credit in their bank accounts. Many have complained that their refunds are delayed. Millions of taxpayers are noticing that their ITR status shows “processed,” but the money has not yet been credited to their bank accounts. The government’s focus on meeting tax collection targets this year appears to be slowing the flow of refunds.
Here’s what experts have to say on tax collections
Vivek Jalan, Partner, Tax Connect Advisory Services LLP, says the direct tax collections till 17th September 25 seem to be in alignment with the policy changes by MoF and procedural changes by CBDT in the recent past. With the massive reduction in individual income taxes for FY 25-26, the non-corporate advance taxes have declined by around 7%, he noted.
Also, on account of very strict monitoring of deductions in the ITRs this year, driven by heightened disclosures, the refunds are being closely scrutinized before release and hence the non-corporate refunds have almost dropped to one-third YoY, he adds.