India’s net direct tax collections rose 13.21% year-on-year to ₹13.37 lakh crore as of October 14, 2026, with corporate tax collections emerging as a key driver of revenue growth. However, a sharp increase in refunds has moderated the growth in net collections, prompting tax experts to highlight both the resilience of revenue generation and the importance of efficient taxpayer services.
According to the figures provided, gross direct tax collections increased 14.89% to ₹16.03 lakh crore from ₹13.95 lakh crore in the corresponding period last year. Refunds rose 24.22% to ₹2.65 lakh crore, compared with ₹2.13 lakh crore a year earlier. Net collections stood at ₹13.37 lakh crore, against ₹11.82 lakh crore in the corresponding period last year.
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Corporate tax collections stood at ₹5.99 lakh crore, compared with ₹4.97 lakh crore in the year-ago period, representing growth of approximately 20.6%. Non-corporate tax collections increased to ₹6.92 lakh crore from ₹6.54 lakh crore, while securities transaction tax (STT) collections rose to ₹46,840 crore from ₹30,902 crore.
Varying pace of growth
The figures point to a divergence in the pace of growth across tax categories, with corporate tax collections expanding faster than non-corporate taxes. At the same time, the rise in refunds has become an important factor in understanding the difference between gross and net revenue growth.
Aravind Srivatsan, Senior Partner and India Tax Leader at Nangia Global, said the 13.21% increase in net tax collections supported the improved economic growth outlook reflected in the IMF’s upward revision of India’s GDP growth forecast to 7%.
However, Srivatsan cautioned that the growth came against a relatively low base, noting that net tax collections had grown by just 5% in 2026. He also pointed to a contrast between global and Indian trends, observing that personal income tax has outpaced corporate tax growth globally, whereas corporate tax collections in India continue to grow faster.
According to Srivatsan, this trend reflects the underlying resilience of the Indian economy and its ability to perform better as global economic shocks ease.
What the refunds show
Richa Sawhney, Partner – Tax at Grant Thornton Bharat, said the latest figures reflect healthy tax buoyancy, with growth across key revenue streams, including corporate taxes and STT. She highlighted the sharp increase in refunds, particularly for non-corporate taxpayers, describing it as indicative of the tax administration’s focus on faster processing of taxpayer claims.
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Richa Sawhney said the trend suggested that revenue growth was being accompanied by improved taxpayer services, with the tax system increasingly focused on both compliance and facilitation. The figures show that refunds have increased substantially, although the data alone does not establish whether faster processing was the sole reason for the rise.
Hitesh Sawhney, Partner at Price Waterhouse & Co LLP, said the figures reinforced the strength of India’s growth narrative. Despite refunds increasing by more than 24%, net direct tax collections rose 13.2%, which he attributed to strong tax buoyancy and improved compliance.
He said net corporate tax collections had increased by more than 20%, indicating healthy business performance, while the rise in STT collections pointed to continued investor participation in financial markets. He added that the trends showed economic expansion translating into revenue growth alongside faster refund processing.
Sandeep Sehgal, Partner – Tax & Valuations at AKM Global, said direct tax collections had maintained healthy momentum, with gross collections rising 14.89% to ₹16.03 lakh crore and net collections reaching approximately ₹13.38 lakh crore.
Sehgal said the growth in net corporate tax collections indicated strong corporate profitability, sustained business activity and improved tax compliance. He also highlighted the more modest growth of around 5.8% in net non-corporate tax collections, attributing it partly to the increase in refunds to individuals and other non-corporate taxpayers, which he said had risen by approximately 67%.
STT collections increase
The increase in STT collections also warrants attention, Sehgal said. He argued that the rise should be viewed in the context of market conditions and foreign investor outflows, suggesting that higher STT rates on futures and options announced in Budget 2026, rather than market momentum alone, contributed to the increase.
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Looking ahead, Sehgal said the government could consider reducing the overlap between STT and long-term capital gains tax in Budget 2027. He argued that such a move could improve the competitiveness of Indian equities for global capital, support the rupee and help reverse foreign outflows without putting revenue targets at risk.
Jayesh Sanghvi, Tax Partner at EY India, said net direct tax collections had reached around 50% of the FY2026-27 Budget Estimate of ₹26.9 lakh crore in the first six and a half months, suggesting that collections were progressing towards the annual target.
Sanghvi said net corporate tax collections were significantly ahead of non-corporate collections, primarily because refunds in the latter category had increased by nearly 67%. He said this could indicate excess tax withholding or advance tax payments for certain taxpayers.
He also said the 51.6% rise in STT collections pointed to continued activity in equity and derivatives markets, with higher STT rates on equity derivatives effective April 2026 contributing to the increase. Sanghvi added that the trajectory of collections and refunds in the second half would be crucial in determining whether the government meets its full-year target.
Overall, the figures indicate that corporate taxes are contributing significantly to direct tax revenue growth, while the sharp rise in refunds is moderating net collections. The experts see the trends as reflecting economic resilience and a growing emphasis on taxpayer services, while also raising questions about the structure of securities transaction taxation and its potential implications for market competitiveness.