Net tax collection by the mid of the second quarter of FY26 (till August 11, 2025) has contracted by 3.95% compared to the corresponding period last year, as per the latest data released by the Central Board of Direct Taxes (CBDT).
The latest figures released by CBDT reveal that the net advance tax collection by the mid of the second quarter of FY26 stood at Rs 6.63 lakh crore, which previously stood at Rs 6.91 lakh crore as on August 11, 2024. The gross tax collection also registered a fall of 1.87%, as it went down from Rs 8.14 lakh crore in the corresponding period previous year to Rs 7.98 lakh crore.
The refunds have gone up by 9.81% to Rs 1.34 lakh crore during the period, compared to Rs 1.03 lakh crore in the previous fiscal year's corresponding period.
“The decline in the net collections is mainly due to the higher volume of refunds issued, especially for the corporate tax. One has to also understands tax collections cannot just have one way trajectory and are more dynamic in nature and what we are observing is basically just the impact of refund outflows on the government’s net revenue position in the early part of the fiscal year,” says Hitesh Sawhney, partner, Price Waterhouse & Co LLP.
The fall in the tax collection is primarily due to the sharp decline in personal income tax collection. While the corporate tax collection has gone up slightly by around 3%, personal income tax collection went down by more than 7% during the period.
Previously, under the new tax regime (for 2024-25), taxpayers with income up to Rs 7 lakh had to pay no taxes. But from 2025-26, the exemption limit has been increased to Rs 12 lakh, making income up to Rs 12 lakh completely tax-free under the new regime.