India’s direct-tax revenue records strong growth
India’s direct-tax collections continued to expand in the first half of the 2026-27 financial year, with net collections rising nearly 13% from a year earlier to ₹12.12 lakh crore as of September 17, 2026, according to provisional data released by the Income Tax Department.
The 12.96% year-on-year increase was supported by higher corporate tax receipts and a strong advance-tax mop-up. Gross direct-tax collections — before refunds are deducted — increased 15.19% to ₹14.32 lakh crore over the same period.
The figures are significant because direct taxes, including taxes on corporate profits and individual income, are a major component of the Centre’s revenue base.
Advance tax collections rise more than 16%
One of the strongest components of the latest tax data was advance tax.
Advance-tax collections reached approximately ₹5.22 lakh crore as of September 17, representing year-on-year growth of 16.18%.
Corporate advance-tax payments increased even faster, rising 18.09% to about ₹4.16 lakh crore, compared with ₹3.52 lakh crore during the corresponding period a year earlier.
Non-corporate advance-tax collections, meanwhile, rose 9.24% to roughly ₹1.06 lakh crore, from ₹96,904 crore in the comparable period.
Advance tax is paid during the financial year rather than entirely at year-end and is based on taxpayers’ estimates of their income and tax liability. As a result, its trend can provide an early indication of taxable corporate profits and income.
Corporate tax collections show strong momentum
The broader corporate-tax numbers also recorded substantial growth.
Net corporate tax collections increased 19.48% to about ₹5.56 lakh crore, while net non-corporate tax collections — covering individuals and Hindu Undivided Families, among others — increased around 6% to more than ₹6.16 lakh crore.
On a gross basis, corporate tax collections before refunds rose more than 16% to approximately ₹6.94 lakh crore, compared with ₹5.95 lakh crore during the corresponding period last year.
The stronger corporate component is particularly noteworthy because it indicates that corporate tax receipts are currently expanding faster than the overall net direct-tax pool.
Refunds jump 29% to ₹2.20 lakh crore
The growth in gross collections was partly offset by a significant increase in tax refunds.
Refunds issued between April 1 and September 17 rose 29.19% year-on-year to more than ₹2.20 lakh crore, compared with about ₹1.79 lakh crore in the corresponding period last year.
This distinction between gross and net collections is important. Gross direct-tax collection measures taxes collected before refunds, while net collection reflects the amount remaining after refunds have been deducted.
Despite refunds growing considerably faster than gross collections, net direct-tax revenue still increased by nearly 13%.
Richa Sawhney, Partner – Tax at Grant Thornton Bharat, said the collections point to “healthy underlying economic activity and the strength of the tax base.” She also said stronger advance-tax payments were a positive indicator for taxpayer confidence and business performance.
Securities Transaction Tax collection jumps 53%
Another standout figure was the government’s collection from the Securities Transaction Tax (STT).
STT collections rose approximately 53% year-on-year to ₹40,214 crore between April 1 and September 17, compared with around ₹26,306 crore during the corresponding period last year.
However, the increase should not automatically be interpreted as an equivalent rise in stock-market trading activity.
Rohinton Sidhwa, Partner at Deloitte India, attributed much of the increase to higher STT rates introduced in Budget 2026, including the increase in the tax rate on equity futures effective from April 1.
That distinction matters when assessing what the surge in STT revenue says about underlying market participation.
How much of the FY27 direct-tax target has been collected?
The Centre has budgeted approximately ₹26.97 lakh crore in direct-tax collections for the full 2026-27 financial year.
At ₹12.12 lakh crore, collections through September 17 represent roughly 45% of that full-year target.
The latest figures therefore show solid year-on-year revenue growth, although the eventual outcome will depend on tax receipts during the remainder of the financial year.
Business Standard noted that the current growth rate is below the roughly 15.25% increase required to reach the budgeted ₹26.97 lakh crore when compared with the previous financial year’s actual collection of ₹23.40 lakh crore.
What the latest tax numbers indicate
Three trends stand out in the September data.
First, gross tax collections are growing faster than net collections, largely because refunds have increased sharply.
Second, corporate and advance-tax collections are showing particularly strong growth, providing a positive signal about taxable business profits and income during the current financial year.
Third, the 53% jump in STT collections needs context because changes in tax rates have contributed to the increase; it cannot be attributed solely to higher trading activity.
Taken together, the figures show that India’s direct-tax base continued to expand through September 17, with stronger gross inflows more than compensating for the substantial increase in refunds.
The next several months will determine whether this momentum is sufficient for the Centre to reach its full-year direct-tax revenue target.
