The Indian government's net direct tax collections grew by 5.1% to over Rs 23.4 lakh crore in the 2025-26 fiscal year, but fell short of the revised target set for the period ending March 2026. The revised estimates (RE) for FY26 had lowered the direct tax collection target to Rs 24.2 lakh crore, down from the original budget estimate of Rs 25.20 lakh crore.
Subdued Collections Amid Income Tax Cuts
The subdued direct tax collection in FY26 follows the income tax cuts announced in the 2025-26 Budget on February 1, 2025. These reductions impacted overall revenue, contributing to the shortfall against targets.
Corporate and Non-Corporate Tax Performance
Net corporate tax collections grew by 11.4% to just under Rs 11 lakh crore during the fiscal year. In contrast, non-corporate tax collection remained flat at over Rs 11.8 lakh crore. The securities transaction tax (STT) collection saw a 7.9% increase, reaching Rs 57,522 crore, according to data released by the Central Board of Direct Taxes (CBDT).
Refund Issuance and Gross Collections
Refund issuance declined by 1.1% year-on-year to just over Rs 4.7 lakh crore in 2025-26. Meanwhile, gross direct tax collection for the recently concluded fiscal stood at approximately Rs 28.1 lakh crore, reflecting a 4% increase from the 2024-25 fiscal year.
