Net Direct Tax Collection Slips 4% In FY26 So Far, Refunds Rise 10%

Net direct tax collections have slipped 4% year-on-year to Rs 6.64 lakh crore in the financial year 2025-26 so far, according to the data shared by the Central Board of Direct Taxation on Tuesday.

In the comparable year-ago period, the net collection had stood at Rs 6.91 lakh crore.

The gross direct tax collection between April 11 and Aug. 11 of the ongoing fiscal stood at Rs 7.99 lakh crore. This marks a decline of 1.9%, as compared to Rs 8.14 lakh crore in the same period last year.

The direct tax refunds jumped to Rs 1.35 lakh crore in FY26 so far, marking a 9.8% climb as compared Rs 1.23 lakh crore in the corresponding period of FY25.

""The tepid performance of advance tax collections seems to have been dampened by high refunds of corporation tax collections and a later deadline for personal income tax filings," said Aditi Nayar, chief economist at ICRA.

For the current fiscal, the government has set a direct tax collection target of Rs 25.2 lakh crore, as per the Budget estimates. The current net collection, at Rs 6.64 lakh crore, represents 26.3% of the FY26 target.

"The available data on advance tax collections suggests that the Government of India’s personal income tax and corporation tax collections are required to record a high double-digit growth in the remaining part of FY26, to meet their respective FY26 targets," Nayar added.

Earlier this month, data released by the Finance Ministry showed India's net goods and services tax collection growth moderated to 1.7% in July, on the back of high refunds. The net GST mop-up came in at Rs 1.68 lakh crore during the month.

The gross GST collections grew 7.5% to Rs 1.96 lakh crore in July 2025 compared to Rs 1.82 lakh crore reported in July 2024, as per the data released on Aug. 1.

The July month saw 66.8% jump in total refunds, which surged to Rs 27,147 crore, compared to Rs 16,275 crore during the same month last year.

Between April and July, GST revenues totalled Rs 8.18 lakh crore—up 10.7% from Rs 7.39 lakh crore during the same period last year.