This increase in refunds is attributed to “better taxpayer services and quicker issuance of refunds,” according to CBDT. Consequently, the net direct tax collection for FY 2025-26 stands at Rs 4.59 lakh crore, a decline from Rs 4.65 lakh crore recorded in the previous year.
The drop in net tax collection was largely due to a contraction in net corporate tax collection, which fell by 5.4% to Rs 1.72 lakh crore. Even personal income tax collection – which has largely been driving the direct tax collections in the last few years – showed a flat growth of just 1% to Rs 2.72 lakh crore.
Advance tax collections for FY 2025-26 (till 19 June 2025) also showed a mixed trend. While overall advance tax collections have grown by 3.87% to Rs 1.56 lakh crore, the growth is primarily driven by Corporate Tax, which saw an increase of 5.86% (Rs 1.22 lakh crore). Non-Corporate Tax advance collections, however, registered a contraction of 2.68% to Rs 33,928.32 crore.