New Delhi: The central government’s net direct tax collections, after accounting for refunds, stood at ₹19.43 trillion so far this fiscal year, up 9.4% from a year earlier.
Data released by the Central Board of Direct Taxes (CBDT) on Wednesday showed that tax receipts from corporations and individuals between 1 April and 10 February were over 80% of the revised direct tax target of ₹24.21 trillion for FY26. The initial target was ₹25.2 trillion.
In the revised estimates for FY26, the government lowered its direct tax target by ₹99,000 crore to account for the impact of tax rate cuts introduced this financial year to boost consumption.
The Centre collected nearly ₹8.9 trillion in corporate tax, net of refunds, registering a 14.5% year-on-year increase. It collected about ₹10.03 trillion from individuals, net of refunds, marking a 5.9% annual growth.
CBDT chairperson Ravi Agrawal told Mint in a post-budget interview on 4 February that the income tax department will be able to meet the direct tax buoyancy of more than 1 reflected in the revised estimates for FY26.
That is, a direct tax revenue increase of 8.96% annually, faster than the 8% nominal GDP growth. Tax buoyancy refers to how fast tax revenue collection grows compared to economic growth rate.
The fourth instalment of advance tax is due by 15 March. About half of annual net direct tax revenue collection comes from this mode of tax collection. Also, many people file revise tax returns by the end of March, adding to the revenue collections.
In the budget for the ongoing fiscal (FY26), the government lowered personal income tax slab rates and offered a rebate for individuals with income up to ₹12 lakh ( ₹12.75 lakh for salaried individuals) to boost household consumption, savings, and investment.
While tax rate cuts implemented in the current fiscal are expected to moderate growth rates for both personal income tax and goods and services tax (GST) revenue receipts, the Centre’s non-tax receipts have been robust so far.
By October-end, the government collected nearly the entire ₹3.25 trillion non-tax revenue target for the full year, including the ₹2.69 trillion dividend from Reserve Bank of India (RBI), a 27% increase from a year ago. Asset sales till March could also add to the government’s non-tax revenue this year.
CBDT data also showed that the tax department issued refunds worth ₹3.34 trillion so far this fiscal, 18.82% lower than the refunds issued during the same period a year ago.
Amit Maheshwari, managing partner, AKM Global, a tax and consulting firm, said, “As per the data released by the Income Tax Department as on date, India’s direct tax collections for FY2025-26 continue to show a positive trajectory. Gross collections up to 10 February 2026 stood at ₹22.78 trillion, recording a growth of about 4.1% over the corresponding period of the previous year, driven by steady contributions from both corporate and non-corporate taxpayers. Importantly, after adjusting for refunds, net collections have grown at a stronger pace of around 9.4%, reflecting moderation in refunds and resilient tax inflows.”
“Statutorily, these figures cover all direct taxes levied under Act and the higher net collections indicate improved revenue realization. The increase is largely attributable to higher personal tax collections and a moderation in refunds compared to the previous year. Overall, the upward trend in collections indicates sustained economic activity and improved tax compliance,” he added.
At gross level, corporate tax collection grew nearly 8%, and non-corporate tax, mainly individual income tax collection, grew 0.95% annually. In the budgets for FY25 and FY26, the government rationalized tax deducted at source (TDS) and tax collected at source (TCS), which, according to officials, has led to reduced refunds this year.
The Centre collected ₹50,279.17 crore in securities transaction tax (STT) so far this year, a tad above the STT receipts from a year ago.
The growth in direct tax collections also comes at a time when the government is bringing in reforms to the direct tax regime.
CBDT’s chairperson Agrawal had said that India’s long-awaited overhaul of its direct tax regime has effectively arrived in stages, combining the simplified Income Tax Act enacted last year with a toned-down penalty and an enforcement framework under the Finance Bill 2026, and the revamped procedures and user-friendly ‘smart’ tax return forms to be rolled out later this month.
The Income Tax Act, 2025 will replace the decades-old Income Tax Act, 1961 and is structured to simplify and streamline the country’s direct tax framework. The law is set to come into effect from 1 April 2026.
Agrawal said the income tax rules to be issued this month under the new statute will have simpler procedures and forms that capture data efficiently.