India's Direct Tax Collections Jump 9.18% To Rs 10.8 Lakh Crore Over Fewer Refunds

Net direct tax collections for the financial year 2025-26, as of September 17, 2025, have shown a notable increase, rising by 9.18% to reach over Rs 10.82 lakh crore or $131 billion.

This growth is primarily attributed to a substantial decline in refunds issued by the Income Tax Department, a key indicator of efficiency in tax processing and compliance.

While gross tax collections also grew, the reduced outflow of refunds was the main driver of the positive net collection figure.

According to data released by the Central Board of Direct Taxes, the net direct tax collection has reached Rs 10.82 lakh crore as of September 17, 2025. This marks a notable growth of 9.18% compared to the Rs 9.91 lakh crore, collected during the same period in the previous financial year, 2024-25.

The primary reason for this strong performance is a sharp 23.87% reduction in refunds, which amounted to Rs 1.60 lakh crore compared to Rs 2.10 lakh crore in the previous year.

The gross direct tax collection, before accounting for refunds, stood at Rs 12.43 lakh crore, showing a growth of 3.39%. This includes collections from Corporate Tax or CT, Non-Corporate Tax or NCT, Securities Transaction Tax or STT, and other taxes.

The advance tax collection also saw a positive trend, growing by 2.90% to reach Rs 4.48 lakh crore. This figure is made up of corporate advance tax, which grew by 6.11% to reach Rs 3.52 lakh crore, and non-corporate advance tax, which saw a decline of 7.30% standing at Rs 96.7 thousand crore.

The data indicates a mixed performance between Corporate and Non-Corporate Taxes. While corporate tax collections have shown a solid growth, the non-corporate tax segment, which includes taxes paid by individuals and other non-corporate entities, experienced a slight dip.

Despite this, the overall net collection remains strong, demonstrating the tax system's effectiveness and the positive impact of measures aimed at improvement. The government's focus on faster processing and reduced refunds has paid off, contributing to a healthy growth in net direct tax revenue.