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In the financial year 2025-26, India's net direct tax collection has experienced a notable increase. The total collection surpassed ₹23.40 lakh crore, reflecting a growth of 5.12%. Despite reductions in income tax and an increase in exemption limits, the stability in collections indicates a robust taxpayer base and sustained economic activity.

Challenges in Meeting Revised Targets

Although there was an increase in net direct tax collection compared to the previous fiscal year, it fell short of the government's revised estimate of ₹24.21 lakh crore, highlighting that targets were not fully achieved despite growth. Initially, the budget estimate was set at ₹25.20 lakh crore but was later revised downward.

Impact of the Recent Budget on Tax Collection

The budget announced on February 1, 2025, had a significant impact on tax collection. Finance Minister Nirmala Sitharaman raised the income tax exemption limit from ₹7 lakh to ₹12 lakh and increased the standard deduction to ₹75,000. Changes were also made to tax slabs and rates, allowing taxpayers to retain more income and stimulating demand.

Corporate and Non-Corporate Tax Collection Insights

According to the revised estimates, corporate tax collection reached ₹11.09 lakh crore, while income tax accounted for ₹13.12 lakh crore. There was a robust growth of 11.4% in net corporate tax collection, which reached ₹10.99 lakh crore. Meanwhile, non-corporate tax collection remained stable at ₹11.83 lakh crore, indicating strong participation from individual taxpayers.

Increase in Securities Transaction Tax

Data from the CBDT shows that the collection from securities transaction tax rose by 7.9% to ₹57,522 crore. However, there was a slight decline of 1.09% in refunds issued, totaling ₹4.71 lakh crore. Overall, the gross direct tax collection amounted to approximately ₹28.12 lakh crore, which is 4.03% higher than the previous financial year.

Expert Opinions on Tax Collection Trends

Jayesh Sanghvi, a tax partner at EY India, noted that while a reduction in personal income tax rates was expected to impact non-corporate collections, strong growth in corporate tax and better management of refunds supported overall growth. Rohinton Sidhwa, a partner at Deloitte India, emphasized that the stability in non-corporate collections despite tax cuts indicates improvements in the tax base and compliance.