The Income Tax Department announced robust growth in direct tax collections for the current financial year, indicating a strengthening fiscal position. As of January 11, the net collection has surged, showcasing a healthy uptick compared to the previous year.
Breakdown of Tax Collections
According to the official data released on Monday, the net direct tax collection grew by 8.82 per cent, reaching a substantial figure of over Rs 18.38 lakh crore. This impressive mop-up is composed of two major streams. The net corporate tax collection contributed more than Rs 8.63 lakh crore, while taxes from non-corporate entities, which include individuals and Hindu Undivided Families (HUFs), accounted for Rs 9.30 lakh crore.
In a positive sign for government revenues, the amount issued as refunds witnessed a significant decline of 17 per cent, standing at Rs 3.12 lakh crore for the period from April 1 to January 11. The gross direct tax collection, before accounting for refunds, also saw an increase of 4.14 per cent, amounting to approximately Rs 21.50 lakh crore.
Securities Transaction Tax and Future Targets
The collection from the Securities Transaction Tax (STT) stood at Rs 44,867 crore during the same timeframe. Looking ahead, the government has set ambitious targets for the fiscal year 2025-26. It has projected the total direct tax collection to reach Rs 25.20 lakh crore, marking a year-on-year growth target of 12.7 per cent.
Furthermore, the authorities aim to collect a sum of Rs 78,000 crore specifically from the Securities Transaction Tax in the upcoming financial year (FY26). These projections underscore the government's confidence in the continued momentum of economic activities and compliance.
Implications for the Economy
The steady growth in direct tax collections, particularly from both corporate and non-corporate segments, points towards broad-based economic recovery and improved compliance mechanisms. The reduction in refunds further bolsters the net revenue position. Achieving the set target for the full fiscal year will be crucial for meeting the government's budgetary expenditures and fiscal deficit goals, providing more room for public investment and social schemes.
