Centre’s net direct tax collections reach ₹21.26 trillion, 95% of revised estimates

The Centre has collected ₹21.26 trillion in net direct taxes so far this fiscal year, reaching 95% of the revised full-year target, the Income Tax Department said Monday after the final advance tax instalment deadline.

Tax revenue, spanning corporate income tax, individual income tax, and securities transaction tax (STT), grew 13.1% year-over-year, outpacing India’s 9.9% nominal GDP growth—a sign of strong tax buoyancy and expanding compliance.

The government has collected ₹9.69 trillion in corporate taxes, up 7.1% from the previous year. Meanwhile, non-corporate tax revenue, which includes individuals, Hindu Undivided Families (HUFs), and firms, rose 17.5% to ₹11.01 trillion as of 16 March, compared to ₹9.37 trillion in the same period last year.

Securities Transaction Tax collections surged 56% to ₹53,095 crore, driven by transactions in equities, derivatives, and equity-oriented mutual funds. STT rates vary from 0.001% to 0.2%, with delivery-based equity transactions taxed at 0.1%.

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While gross direct tax collections grew 16.15%, net collections expanded at a slower 13.1%, reflecting a 33% jump in refunds to ₹4.6 trillion.

Advance tax collections, which allow businesses and individuals to pay taxes in instalments, grew 14.6% to ₹10.44 trillion. Corporate advance tax payments rose 12.54%, while non-corporate advance tax surged 20.47%, signalling broad-based economic activity.

With the final advance tax instalment deadline on 16 March, experts see the strong collections as a sign of India’s economic resilience and expanding tax base.

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“This trend not only highlights improved tax compliance but also positions India as a dynamic and thriving market, poised for sustained development. Notably, the Income Tax Department's continuous monitoring through AI-driven systems has played a crucial role in boosting advance tax collections by enhancing compliance and minimizing tax evasion,” said Amit Maheshwari, tax partner at AKM Global, a tax and consulting firm.

However, FY26 personal income tax collections remain uncertain, as the ₹1 trillion tax relief announced in the Union Budget could weigh on revenues.

Also read | The government is banking on tax cuts to boost consumption. What if it doesn’t pan out?

The government had raised its direct tax target by ₹30,000 crore in the FY26 budget presented on 1 February.