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The Centre’s net direct tax collection rose nearly 13 per cent year-on-year (Y-o-Y) to ₹12.12 trillion as of September 17, supported by strong corporate tax receipts, healthy personal and a sharp jump in Securities Transaction Tax (STT), even as refunds accelerated, provisional data released by the income-tax department on Friday showed.
This represents about 45 per cent of the full-year direct tax collection target of ₹26.97 trillion.
Direct tax revenue so far this year has grown slower than the 15.25 per cent needed to achieve the full-year target compared with last fiscal’s actual collection of ₹23.40 trillion.
Gross direct tax revenue collection stood at ₹14.32 trillion up to 17 September, registering an annual growth of 15.19 per cent. Refunds increased 29.19 per cent to ₹2.20 trillion during the period.
Corporate tax collections remained robust, with gross collections rising 16.58 per cent to ₹6.95 trillion, while net collections increased 19.48 per cent to ₹5.56 trillion after refunds.
Net non-corporate tax collection, which mainly comprises tax on personal income, grew more modestly as tax refunds surged.
Gross collections increased 12.30 per cent to ₹6.98 trillion and net collections rose 6 per cent to ₹6.16 trillion.
Advance tax collections rose 16.18 per cent to ₹5.22 trillion. Corporate advance tax payments grew 18.09 per cent to ₹4.16 trillion, while non-corporate advance tax rose 9.24 per cent to ₹1.06 trillion.
According to Jayesh Sanghvi, tax partner, EY India, the current growth indicates that the buoyancy is broad-based.
“Nominal gross domestic product for Q1 FY27 grew 10.3 per cent, while Budget 2026-27 assumes full-year nominal growth of 10 per cent. Against that baseline, gross direct tax buoyancy runs at roughly 1.47 and net buoyancy at 1.26 — a reversal from FY26, when net direct tax growth had trailed nominal GDP after the previous year’s income-tax rate cuts,” Sanghvi said.
Two structural forces may be at work: rising formalisation of the workforce, and the fact that this is the first September instalment paid under the Income-tax Act, 2025, he added.
Hitesh Sawhney, partner, Price Waterhouse & Co LLP, said direct tax collections continue to maintain healthy momentum. Refunds have risen significantly during the period, with non-corporate tax refunds more than doubling compared with last year.
Despite these enhanced refunds, net tax collections have grown at a steady pace, with overall net tax collections remaining higher by ₹1.39 trillion.
Net corporate and non-corporate direct tax collections stand at about 45 per cent of the Budget Estimate for FY27, while STT stands at about 55 per cent of the budgeted estimates, Sawhney said.
“Net direct-tax collections are showing both strength and resilience, driven by stronger gross tax inflows, enhanced compliance, and sustained economic and market activity. The most encouraging signal is that net collections have continued to rise despite a substantial increase in refunds.”
According to Sanghvi, faster refund processing is a taxpayer-service win, but it will compress net-collection growth in later quarters if sustained. Non-corporate advance tax grew only 9.24 per cent, well below corporate advance tax, suggesting small-business taxpayers may still be recalibrating.
STT remains the standout
Securities Transaction Tax collections rose 52.87 per cent to ₹40,214 crore from ₹26,306 crore in the year-ago period. The surge is a proxy for equity-market turnover and personal capital-gains liabilities, Sanghvi said. STT has already reached about 55 per cent of its full-year Budget Estimate of Rs 73,700 crore, Sawhney noted.
The 53 per cent jump in STT follows the April 1 revision in rates on derivatives. STT on sale of futures was raised from 0.02 per cent to 0.05 per cent of traded value, and on options premium from 0.10 per cent to 0.15 per cent . This is the second hike since 2024.
For FY27, the government has budgeted ₹26.97 trillion in direct tax collections. The actual net direct tax collection for FY26 was ₹23.40 trillion, lower than the revised estimate of ₹24.21 trillion. The shortfall was around ₹81,000 crore.
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