Direct tax collections after refunds grew 13% year-on-year to Rs 12.12 lakh crore as of September 17 this fiscal year, driven primarily by strong advance tax payments by companies for the second quarter, data released by the Central Board of Direct Taxes (CBDT) on Friday showed.
Overall advance tax collections increased 16.2% year-on-year to Rs 5.22 lakh crore till September 17, with corporate payments growing at 18.1% at Rs 4.16 lakh crore on strong profits made by a section of India Inc. Mop-up from the non-corporate side, comprising mostly individual taxpayers, rose 9.2% to Rs 1.06 lakh crore.
The government collected Rs 14.32 lakh crore in direct taxes before refunds till September 17, up 15.2% year-on-year. The pace of refunds picked up, rising 29.2% year-on-year during April-September 17.
The pace of growth of direct tax collections slowed from over 23% seen till August 10. Despite this, the growth is still higher than the 11.4% projected in the Budget for the whole of FY27.
“Net (post-refunds) direct-tax collections are showing both strength and resilience, driven by stronger gross tax inflows, enhanced compliance, and sustained economic and market activity. The most encouraging signal is that net collections have continued to rise despite a substantial increase in refunds,” said Hitesh Sawhney, partner, Price Waterhouse & Co.
Total direct tax collections so far this year account for 44.9% of the government’s budgeted direct tax collections target of Rs 26.97 lakh crore for 2026-27 (April-March).
According to Sumeet Hemkar, partner, Deloitte India, the latest tax collection figures suggest that the central government is “firmly on track towards meeting or exceeding its Budget estimates on direct tax collections for FY27.”
Corporate tax collections after refunds rose 19.5% year-on-year to Rs 5.56 lakh crore during the reporting period. The Budget had projected corporate tax collections to grow 11% to Rs 12.31 lakh crore in FY27.
Non-corporate tax (NCT) collections, meanwhile, slowed down considerably. NCT after refunds rose 6% year-on-year to INR 6.16 lakh crore. NCT includes taxes paid by individuals, Hindu Undivided Families, firms, local authorities, and artificial juridical persons.
The government has collected Rs 40,214 crores as securities transactions tax till September 17, up 52.9% from the same period a year ago. In the Budget, the government had projected STT collections to rise 15.8% year-on-year to Rs 73,700 crores. The sharp rise in STT collections reflects continued activity in the securities market and the increase in the tax on futures transactions to 0.05% from 0.02% in the Budget for FY27.
The double-digit rise in direct tax collections after refunds, advance tax, corporate tax, and STT shows that revenue buoyancy is broad-based, said Jayesh Sanghvi, tax partner, EY India.
According to Sanghvi, buoyancy in direct tax collections after refunds is 1.26 considering the nominal GDP growth of 10.3% in April-June. This is a meaningful reversal from FY26, when net direct tax growth had trailed nominal GDP after the income-tax rate cuts of the previous year, Sanghvi said.
The tax collection trends are broadly consistent with the underlying momentum in the domestic economy, with GDP growth of 7.8% in the April-June quarter, said Amit Maheshwari, managing partner, AKM Global.
“While tax collections cannot by themselves be viewed as a direct measure of economic growth, the sustained increase in corporate and advance tax collections provides an indication of continued income and business activity during the period,” Maheshwari said.