India's net direct tax collections have demonstrated a strong upward trajectory, registering a 9% increase to reach Rs 10.82 lakh crore in the current financial year 2025-26 (FY26) up to September 17. This growth is primarily attributed to a significant reduction in refunds issued by the Income Tax Department and increased corporate advance tax payments.

The gross direct tax collection, before accounting for refunds, has also seen a rise, climbing 3.39% to Rs 12.43 lakh crore. However, the issuance of refunds has decreased by a substantial 23.87%, amounting to Rs 1.60 lakh crore, which has significantly contributed to the higher net direct tax figures. In the corresponding period of FY25, the gross tax collection stood at Rs 12.02 lakh crore, with refunds totaling Rs 2.10 lakh crore.

Advance tax collection has shown moderate growth, increasing by 2.90% to Rs 4.48 lakh crore. Within this, corporate tax accounted for Rs 3.52 lakh crore, reflecting a 6.11% increase, while the non-corporate segment, which includes individuals and Hindu Undivided Families (HUFs), experienced a contraction of 7.30%, totaling Rs 96,700 crore. In comparison, the advance tax collections for the same period in FY25 were Rs 4.36 lakh crore, with Rs 3.32 lakh crore from corporate tax and Rs 1.04 lakh crore from non-corporate sources.

The net corporate tax collection has risen to over Rs 4.72 lakh crore, compared to Rs 4.50 lakh crore in the corresponding period last year. Non-corporate tax collections have also improved, reaching approximately Rs 5.84 lakh crore, up from Rs 5.13 lakh crore in the same period a year ago.

Furthermore, collections from the Securities Transaction Tax (STT) have inched up to Rs 26,306 crore, slightly higher than the Rs 26,154 crore recorded in the corresponding period last year. The government has set a collection target of Rs 78,000 crore for STT in FY26.

For the entire fiscal year 2025-26, the government projects direct tax collections to reach Rs 25.20 lakh crore, representing a 12.7% increase year-on-year. The current trend in tax collections, driven by stable corporate inflows and reduced refunds, suggests that the government is well-positioned to achieve its full-year target.

It is important to note that direct taxes primarily consist of income tax paid by individuals and corporate tax, forming a significant portion of the central government's gross tax revenue. Non-corporate tax includes taxes paid by individuals, HUFs, firms, Associations of Persons (AoPs), Bodies of Individuals (BoIs), local authorities, and artificial juridical persons.