THEBUSINESSBYTES
BUREAU
NEW
DELHI, MAY 4, 2026
India’s net direct
tax collections registered a moderate growth of 5.12 per cent to ₹23.40 lakh crore in the financial
year 2025–26 (FY26), reflecting the impact of fiscal policy adjustments even as
the figure fell short of the revised target for the year.
According to official
data released by the Central Board of Direct Taxes (CBDT), the government had
pegged its revised estimate (RE) for FY26 at ₹24.21 lakh crore, lower than the original Budget estimate
of ₹25.20 lakh crore. Despite the upward trajectory, actual collections
remained below expectations, indicating a calibrated slowdown
linked to tax policy changes.
The relatively
subdued growth in direct tax revenues comes in the backdrop of significant
income tax relief measures announced in the Union Budget 2025–26. Finance
Minister Nirmala Sitharaman had raised the income tax rebate threshold to ₹12 lakh from ₹7 lakh, effective
April 1, 2025, alongside revising tax slabs and increasing the standard
deduction to ₹75,000. These measures were aimed at boosting disposable income
and stimulating consumption demand across the economy.
A closer look at the
tax composition shows that corporate tax collections remained resilient,
growing 11.4 per cent to ₹10.99
lakh crore in FY26, against ₹11.09 lakh crore projected in the revised
estimates. Meanwhile, non-corporate tax
collections — which include taxes from individuals, Hindu Undivided Families,
firms, and other entities — remained largely flat at ₹11.83 lakh crore, highlighting the
direct impact of personal tax relief measures.
The income tax component,
including Securities Transaction Tax (STT), stood at ₹13.12 lakh crore as per revised
estimates. Notably, STT collections alone rose 7.9 per cent to ₹57,522 crore,
indicating sustained activity in equity markets during the fiscal year.
Overall, gross direct
tax collections for FY26 reached approximately ₹28.12 lakh crore, marking a 4.03 per cent increase over
the previous fiscal’s ₹27.03 lakh crore. However, refund issuance saw a
marginal decline of 1.09 per cent year-on-year, amounting to ₹4.71 lakh
crore.
The data suggests
that while tax buoyancy remains intact, policy-driven relief measures have
moderated revenue expansion in the short term. Economists view this as a
strategic trade-off, where immediate fiscal pressures are balanced against the
long-term objective of strengthening consumption-led growth.
