India’s net direct tax collections rose a modest 5.12 per cent to ₹23.4 trillion in 2025-26 (FY26), against the 9 per cent growth assumed in the Revised Estimates (RE) for the same financial year, according to provisional data released by the Central Board of Direct Taxes on Monday.
This marks the lowest growth rate since the pandemic-induced 10 per cent contraction in 2020-21. The government had revised downwards its net direct tax collection estimate for FY26 to ₹24.21 trillion in the RE, from the Budget Estimate of ₹25.2 trillion for the same year.
Thus, it achieved roughly 96.7 per cent of the RE target, falling short by around ₹81,000 crore. Growth was largely driven by robust corporate tax collections, while non-corporate tax collections showed near stagnation due to substantial relief to personal income taxpayers. The latter comprise taxes paid by individuals, Hindu Undivided Families, firms, associations of persons, bodies of individuals, local authorities, and artificial juridical persons.
Gross collections increased 4.03 per cent to ₹28.12 trillion during the year ended March 31, 2026. Refunds declined 1.09 per cent to ₹4.72 trillion, supporting net tax collections. Net corporate tax collections grew 11.4 per cent to ₹10.99 trillion, indicating improved profitability and compliance among companies. In contrast, non-corporate tax collections remained nearly flat, rising just 0.04 per cent to ₹11.83 trillion.
Securities transaction tax collections rose nearly 8 per cent to ₹57,522 crore, reflecting sustained activity in equity markets despite intermittent volatility. According to Rohinton Sidhwa, partner at Deloitte India, year-end tax revenues were broadly in line with expectations, with modest growth of 5 per cent.
“Non-corporate tax revenues have surprisingly sustained themselves despite a significant rate cut. This is the largest component of direct tax collections and reflects both growth in volumes and the number of taxpayers.” Jayesh Sanghvi, tax partner at EY, said non-corporate tax collections were expected to be impacted by rate cuts in personal income-tax announced in the Budget.
“Healthy corporate tax growth and refund management have supported overall growth at 5.12 per cent. Strong corporate tax collections augur well despite disruptions from global conflicts and supply chains. Hopefully, this resilience will reflect positively in the coming period,” he said. Riaz Thingna, partner at Grant Thornton Bharat, said the trend suggests tax collections are likely to become more predictable and stable in the short term. “It also indicates a clear movement towards a more formal economy. This is good news for the stock markets,” he added.
As per Hitesh Sawhney, partner, Price Waterhouse & Co LLP, provisional direct tax numbers as on March 31, 2026, point to a steady close to the financial year, with both gross and net tax collections recording year-on-year growth.
Net direct tax collections are estimated to be up by 5.12 per cent compared to last year, supported by a 4.03 per cent growth in gross tax receipts, reflecting the underlying resilience of the economy.
“…Overall, despite softer traction in non-corporate taxes and STT, the robust momentum in corporate tax collections and the broader buoyancy in overall direct tax revenues set a positive tone for the government’s fiscal position as FY 2025-26 draws to a close,” said Sawhney.
