New Delhi: The government has collected ₹23.4 trillion in direct taxes after adjusting for refunds in FY26, posted 5% annual growth but fell short of its lowered revised target for the year, official data released on Monday showed.
In the Union Budget for FY27, presented on February 1, the government cut its net direct tax revenue target for FY26 to a little less than ₹1 trillion up to ₹24.2 trillion. This implies a 3.3% shortfall in tax revenue from the revised estimates.
Under direct taxes, the government collected ₹10.99 trillion in corporate taxes during FY25, up 11.4% from FY25. This mop-up from companies is higher than the original target for the year, but slightly lower than the subsequent upwardly revised figure.
Personal income tax, collected from individuals, which makes up the majority of “non-business entities” tax revenue. ₹11.83 trillion in FY26, government data showed. The picture is a notch above the FY25 mop-up, but well below it ₹13.12 trillion target revised for FY26.
Slightly higher
Securities Transaction Tax (STT) has been loaded ₹57,522 crore to the government in FY26, slightly more than a year ago.
The government said it issued ₹4.71 trillion in tax refunds to individuals and corporations in FY26, down a notch from a year ago.
For fiscal year 27, the government aims for direct tax collection ₹26.97 trillion. Taking into account direct tax collection data for FY26, this means a tough demand for annual growth of 15.2%.
Experts said the government’s direct tax collection was on expected lines – largely flat. Rohinton Sidhwa, partner at Deloitte India, said that income tax revenue has surprisingly been growing despite a very significant reduction in tax rates. This is the largest component in direct taxes and reflects the growth in collection as well as the number of taxpayers, Sidhwa said.
In the FY26 budget, the government restructured the personal income tax tables and rates and offered a discount for individuals earning up to ₹12 million annually to increase household consumption, savings and investment.
