Net direct tax collections up 13.2% at ₹13.38 tn, corporate tax buoys

New Delhi: India’s net direct tax collections rose 13.2% year-on-year to ₹13.38 trillion so far this fiscal as of 14 October, provisional data from the income tax department released on Thursday showed. The net direct tax mop-up was at ₹11.82 trillion in the year ago period.

Gross direct tax collections rose 14.9% to ₹16.03 trillion from ₹13.95 trillion, while refunds rose 24.2% to ₹2.65 trillion from ₹2.13 trillion, the data showed.

The Union budget for financial year 2027 (FY27) has pegged government's net tax revenue at ₹28.67 trillion and the gross figure at ₹26.97 trillion.

Direct taxes, a major source of government revenue to fund its expenditure, comprise corporate and non-corporate taxes, including personal income tax and securities transaction tax (STT).

India's net corporate tax collections grew 20.7% to ₹5.99 trillion, compared with ₹4.97 trillion a year ago. Net non-corporate tax collections, which include taxes paid by individuals, Hindu undivided families, firms and other entities, rose 5.8% to ₹6.92 trillion from ₹6.54 trillion. A stronger corporate tax mop-up points to robust receipts from companies, as the economy enters into the second half of the fiscal.

Gross corporate tax collections grew 16.9% to ₹7.53 trillion, while the gross non-corporate tax rose 11.6% to ₹8.03 trillion, the data showed.

Gross direct tax collections of ₹16.03 trillion as of 14 October amounted to about 59.4% of the ₹26.97 trillion budgeted for FY27.

STT collections for the period were up 51.6% to ₹46,840 crore from ₹30,902 crore a year ago.

Refunds issued so far this fiscal rose to ₹2.65 trillion from ₹2.13 trillion. In this, non-corporate tax refunds rose to ₹1.11 trillion from ₹66,550 crore a year ago, while corporate refunds increased to ₹1.54 trillion from ₹1.47 trillion.

The healthy tax collections come amid improving growth prospects for the Indian economy. The International Monetary Fund (IMF) on Tuesday raised its FY27 GDP growth forecast to 7.0% from 6.4%, citing stronger-than-expected economic momentum, resilient domestic demand and robust services activity. This followed similar upgrades by the World Bank, which raised its forecast to 7.1% from 6.6% earlier, and the Reserve Bank of India that has projected growth of 7.1%.

“The growth in direct tax collections is encouraging and points to healthy tax inflows in the first six-and-a-half months of FY27. However, the pace of refunds and collections in the coming months will be important in determining whether the government meets its full-year target," said Dharmveer, assistant professor at the Delhi School of Economics. "The strong growth in corporate tax collections is also a positive sign, but sustaining this momentum will be key in the second half of the fiscal year.”

Richa Sawhney, partner - tax at Grant Thornton Bharat, noted the high refunds and said it could indicate efficiency in tax administration. “The latest data reflects a balanced revenue profile, with growth visible across both corporate taxes and securities transaction taxes," she said. "Although the sharp increase in refunds has impacted net collection growth, it is also indicative of more efficient refund processing by the tax administration, particularly in case of non-corporate taxpayers. This suggests that collection efficiency is being accompanied by improved taxpayer services.”

The robust tax data comes amid a debate over capital gains taxation in the run-up to the Union budget for FY28.

Finance minister Nirmala Sitharaman on Tuesday acknowledged discussions around long-term capital gains (LTCG) tax and STT, but did not indicate whether the government would consider changes in them in the upcoming budget.

“We are very close to the budget... and it may not be the best time for me to say what I will or what I will not consider," Sitharaman had said at the Bloomberg New Economy Forum. "So, I'll tread cautiously on that.”

She said investors in India and abroad had commented on the LTCG tax, while the coexistence of capital gains tax and STT remains a subject of debate.

Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.

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