India's Direct Tax Collections Show Mixed Results Amid Rising Refunds

Overview of Direct Tax Collections

New Delhi: As of June 19, the total gross direct tax collection for the fiscal year 2025-26 has increased by 4.86% to reach Rs 5.45 lakh crore, according to the latest data from the Income Tax department.

Despite this growth, net collections experienced a slight dip, primarily due to an uptick in refunds. The net direct tax collection fell by 1.39%, amounting to Rs 4,58,822 crore, down from Rs 4,65,275 crore in the previous fiscal year.

The government has issued direct tax refunds totaling Rs 86,385 crore by June 19, reflecting a significant increase of 58.04% compared to the same period in 2024-25, as per official statistics.

The Central Board of Direct Taxes (CBDT) reported that net direct tax collections comprise corporate tax at Rs 1.72 lakh crore (after refunds), non-corporate tax at Rs 2.72 lakh crore, and securities transaction tax at Rs 13,013 crore (after refunds).

While non-corporate tax collections saw a decline of 2.68% in advance tax, corporate tax collections rose by 5.68%. Overall, advance tax receipts increased by 3.87%, totaling Rs 1,55,533 crore.

Direct taxes are imposed on an individual's income or profits and are paid directly to the government.

To enhance taxpayer convenience, the Income Tax department has introduced the 'e-Pay Tax' feature. Additionally, the Union Budget has proposed a significant reform of the Income-tax Act, 1961, aimed at increasing transparency.

In related news, India's gross Goods and Services Tax (GST) collection for May 2025 reached Rs 2.01 lakh crore, representing a 16.4% increase from Rs 1.72 lakh crore collected in May 2024.

This marks the second consecutive month that GST revenues have exceeded Rs 2 lakh crore, indicating robust economic activity and consistent growth in consumption. In April, GST collections peaked at an unprecedented Rs 2.37 lakh crore, a 13% increase from March, according to data from the Ministry of Finance.