Govt's net direct tax receipt grows 6.3% so far this fiscal to ₹11.89 trillion

New Delhi: The Centre has netted ₹11.89 trillion in corporate and personal income taxes, including securities transaction tax, so far this financial year, showing a 6.3% rise from last year.

This represents 47% of the ₹25.2 trillion direct tax collection target for the current financial year.

Prior to adjusting for tax refunds, direct tax revenue collection up to 12 October this financial year stood at ₹13.92 trillion, showing an annual growth of 2.4%.

The government issued ₹2 trillion in tax refunds to individuals and businesses, according to the income-tax department.

Refund drop

This is a 16% decline from the refunds issued in the same time a year ago, mainly because non-corporate taxpayers such as individuals received smaller refunds. In the case of corporate taxpayers, there has been a 16% jump in refunds issued during the period, data showed.

Revenue receipt from securities transaction tax (STT) remained steady at ₹30,878 crore so far this year, showing only a less than 1% growth from the level seen in the same time a year ago. The STT is levied on the sale and purchase of shares on stock exchanges.

Data shows that there is a moderation in Centre’s direct tax revenue collections. The net direct tax revenue growth rate of 6.3% so far this year is just half of the 12.65% increase forecast in the Union budget for this year.

In FY25, the government had managed a 14.35% net direct tax collection growth. The personal income tax relief announced in this year’s budget is estimated to cost the exchequer about ₹1 trillion. The rate reduction was widely expected to have an effect on the tax collection growth rate.

Policymakers believe the tax rate cut will boost consumption demand and stimulate growth. Central and state governments last month lowered the GST rate applicable on a host of goods and services with the same objective, seeking to add a ₹2 trillion demand stimulus to the economy.

Corporate surge

The 6.33% growth in net direct tax revenue collection was driven primarily by higher inflows from corporate tax of ₹5.02 trillion and non-corporate tax of ₹6.56 trillion, said Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm.

“While overall gross collections rose by 2.36%, reaching ₹13.92 trillion, refund outflows declined sharply by 15.98% to ₹2.03 trillion, further supporting the net growth. The data indicates continued rise in direct tax receipts, with sustained performance in both corporate and non-corporate segments contributing to the positive trajectory,” said Maheshwari.