Tax: India’s net direct tax collection saw an increase in the financial year 2025-26. The total collections surpassed Rs 23.40 lakh crore, marking a growth of 5.12%. Even with income tax reductions and higher exemption limits, the collections remained steady, showcasing the resilience of both the taxpayer base and economic activity.
While net direct tax collection rose in the last fiscal year, it still fell short of the government’s revised estimate (RE) of Rs 24.21 lakh crore, suggesting that despite the growth, the target was not met. The earlier budget estimate was Rs 25.20 lakh crore, which was subsequently lowered.
The most significant influence on tax collection this year was the budget presented on February 1, 2025. Finance Minister Nirmala Sitharaman increased the income tax exemption limit from Rs 7 lakh to Rs 12 lakh and raised the standard deduction to Rs 75,000. Adjustments were also made to tax slabs and rates, allowing ordinary taxpayers to retain more money and stimulating demand.
As per revised estimates, corporate tax collections reached Rs 11.09 lakh crore, while income tax (including STT) amounted to Rs 13.12 lakh crore. Net corporate tax collections experienced a strong growth of 11.4%, totaling Rs 10.99 lakh crore. Non-corporate tax collections remained relatively stable at ₹11.83 lakh crore, indicating robust participation from both individual and other taxpayers.
STT increased
According to CBDT data, Securities Transaction Tax (STT) collections rose by 7.9% to ₹57,522 crore. Refunds issued saw a decline of 1.09%, totaling Rs 4.71 lakh crore. Overall gross direct tax collections reached approximately Rs 28.12 lakh crore, reflecting a 4.03% increase from the previous financial year. Jayesh Sanghvi, a tax partner at EY India, noted that the reduction in personal income tax rates was anticipated to affect non-corporate collections, but the strong growth in corporate taxes and improved management of refunds bolstered overall growth.
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