As a result of strong domestic demand and compliance, direct tax collections are rising due to higher personal income tax inflows and an increasing non-corporate taxpayer base.
According to the most recent statistics from the Central Board of Direct Taxes, India’s net direct tax receipts for 2025–2026 increased 6.33 percent year over year to ₹11.89 trillion as of October 12. This increase was mostly due to increased inflows from non-corporate taxpayers.
While non-corporate tax, which comprises payments made by individuals, Hindu Undivided Families (HUFs), businesses, and other organizations, grew 10.49 percent to ₹6.56 trillion, net corporation tax receipts increased 2.06 percent to ₹5.02 trillion.
Securities transaction tax revenues increased by 0.81 percent to ₹30,878.46 crore, while other minor tax revenues fell by 86.36 percent to ₹293.68 crore.
During that time, gross direct tax receipts increased 2.36 percent to ₹13.92 trillion, up from ₹13.6 trillion during the same period the previous year. Refunds decreased 15.98% to ₹2.03 trillion, indicating a slowdown in outlays in contrast to the fast refund rate of the prior year.
Refunds to non-corporate taxpayers decreased to ₹62,359.29 crore, while corporate refunds totaled ₹1.41 trillion. Tax experts say the slowdown in corporate tax growth is due to increased depreciation claims associated with continuing capital expenditures and worse profit patterns in certain industries.
The founder of Rastogi Chambers, Abhishek A. Rastogi, said that the consistent increase in net direct tax revenues, especially from non-corporate taxpayers, underscores India’s increasing tax base and the depth of economic activity, even in the face of a global downturn. He said, “The increase in donations from people, businesses, and professionals shows that development is emerging across sectors and is no longer limited to huge corporations, showing greater domestic demand and income momentum.”
The rise also suggests more formalization and better digital compliance, which have bolstered the tax system’s efficiency and transparency,” Rastogi said. All things considered, the strength of India’s economic foundation and its consistent course toward fiscal consolidation are shown by the buoyancy of tax receipts.
However, Himanshu Parekh, a partner at KPMG, said that the GDP’s robust rise this year and the 2.36 percent gain in gross direct tax collection seem muted. “The government will need to take the necessary steps to guarantee stronger tax growth for the remainder of the year in order to preserve budgetary discipline,” he said.