Advance Tax Collection Shows Muted Growth; Corporates Up 6.1%, Individuals Down 7.3%

India's advance tax collections showed a muted growth of just 2.9% year-on-year, touching Rs 4.49 lakh crore as of Sept. 17, 2025, according to CBDT provisional data. The figures include payments made towards the second installment of advance tax that was due on Sept. 15.

The headline number reflects a divergent trend between corporates and individuals. Corporate advance tax collections rose 6.1% to Rs 3.52 lakh crore, underscoring healthy profitability across large businesses. By contrast, non-corporate taxpayers – individuals, HUFs, firms and trusts – saw a 7.3% decline, with collections slipping to Rs 96,784 crore.

Tax experts note that the robust showing by corporates signals resilience in company earnings, while the fall in non-corporate contributions could point to pressure on personal incomes and smaller business segments.

Despite the relatively muted growth, officials remain confident of meeting the government's direct tax collection target for FY26. The Centre has budgeted Rs 25.2 lakh crore in net direct tax collections for the fiscal 2025-26, and policymakers expect stronger inflows in the remaining installments.

Advance tax is paid in four installments during the financial year and serves as a lead indicator of economic activity and revenue trends. The September installment is particularly important, offering an early glimpse into the earnings trajectory for the year.

Net Direct Tax Collections Rise 9%

Overall direct tax collections remained buoyant. Gross collections stood at Rs 12.43 lakh crore, up 3.4% year-on-year. Refunds issued fell sharply to Rs 1.61 lakh crore, a decline of 23.9%. This resulted in net direct tax collections of Rs 10.83 lakh crore, up 9.2% compared to Rs 9.91 lakh crore in the same period last year.

The break-up shows the corporate tax net at Rs 4.72 lakh crore, up from Rs 4.50 lakh crore a year ago. The non-corporate tax net stood at Rs 5.84 lakh crore, higher than Rs 5.13 lakh crore in the previous year. Securities Transaction Tax (STT) remained steady at Rs 26,306 crore.

With two more advance tax installments due in December and March, policymakers will closely watch whether the gap between corporate and individual contributions narrows in the remaining quarters.