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Net direct tax collection down 4% to nearly ₹6.63 trillion till August 11
Gross direct tax collection too contracted 1.87 per cent to ₹7.99 trillion so far in FY26.
For FY26, the Centre has projected direct tax receipts at ₹25.2 trillion.
In FY25, net direct tax collection rose 13.57 per cent to ₹22.26 trillion, surpassing the initial Budget estimate of ₹22.07 trillion.
'Gross receipts might have declined as the majority of the taxpayers have shifted to the new tax regime. Also, after the government announced a rebate for an income up to ₹12 lakh per annum and revised the tax slabs, it might have collected less tax deducted at source, leading to low revenue from personal income tax,' a government official said.
Net non-corporation tax, which includes taxes paid by individuals, Hindu undivided families, firms, bodies of individuals, associations of persons, local authorities, and artificial juridical persons, decreased 7.45 per cent on a yearly basis to ₹4.12 trillion during the same period.
Net corporation-tax collection grew around 3 per cent year-on-year to ₹2.28 trillion.
Securities transaction tax (STT) collection also rose 3.5 per cent to ₹22,362 crore during the same period.
Refunds released as of August 11 stood at ₹1.34 trillion, of which a major chunk, ₹1.03 trillion, went to companies.
Direct-tax refunds increased by 9.8 per cent.
According to experts, the tepid performance of direct-tax collection so far has been significantly affected by the high volume of refunds, particularly in corporation tax.
According to Hitesh Sawhney, partner with PwC, this trend highlights the dynamic nature of tax administration and the impact of refund outflows on the government's net revenue position in the early part of the financial year.
The decline in non-corporation tax collection may indicate stress in the formal sector, he said.
Aditi Nayar, chief economist, Icra, said extending the last date for filing income-tax return (ITR) was a reason for subdued growth in personal income tax collection.
The Centre had extended the deadline for ITR filing from July 30 to September 15.
'The data on advance tax collection suggests that the government's personal income-tax and corporation-tax collection is required to record high double-digit growth in the remaining part of FY26, to meet their respective FY26 targets. While this may seem challenging, the growth rates in net tax collection are likely to improve as the year progresses, and the base normalises,' Nayar stated.
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