India’s net direct tax collections fell short of the revised budget estimate for 2025–26 by about Rs80,000 crore, even as overall receipts registered modest growth during the year, according to data released by the Ministry of Finance on Monday.
Net direct tax collections rose 5.12% year-on-year to Rs23.40 lakh crore in FY26, up from Rs22.26 lakh crore in the previous year. However, this was below the government’s revised estimate of Rs24.21 lakh crore.
The shortfall was largely driven by lower-than-expected non-corporate tax collections. Net non-corporate taxes — comprising personal income tax and securities transaction tax (STT) — came in at Rs12.41 lakh crore, missing the revised target of Rs13.12 lakh crore by about Rs70,000 crore. In FY25, these collections stood at Rs12.36 lakh crore.
Corporate tax collections also came in slightly below expectations. Net corporate tax stood at Rs10.99 lakh crore, compared with the revised estimate of Rs11.09 lakh crore. However, corporate tax revenues recorded a robust 11.4% growth over the previous year.
Commenting on the trend, Rohinton Sidhwa, Partner at Deloitte India, said year-end tax revenues were largely flat, with growth of around 5%. He noted that non-corporate tax revenues had held up despite significant rate cuts, reflecting an increase in both taxpayer base and volumes.
On a gross basis (before refunds), direct tax collections grew 4.03% to Rs28.11 lakh crore in FY26, compared with Rs27.03 lakh crore a year ago.
Of the gross collections, corporate taxes contributed nearly half at Rs13.8 lakh crore, up around 8% from Rs12.72 lakh crore in FY25. In contrast, gross non-corporate tax collections remained largely flat, declining marginally by 0.1% to Rs13.72 lakh crore from Rs13.73 lakh crore in the previous year.