Direct Tax Collections Take a Hit: Refunds Push Direct Tax Revenue Down 3.95%

The net direct tax collection in India has taken a hit or declined by 3.95% year-on-year to Rs 6.64 trillion in the period between April 1 to August 11, data from the Income Tax Department showed on Tuesday.

What Is The Reason Behind This Decline?

This decline is primarily due to a rise in tax refunds issued during the period.

On the gross basis, before accounting for refunds, direct tax collections stood at Rs 7.99 lakh crore, which is a 1.87% decline from Rs 8.14 lakh crore which was collected during the same period last year.

The tax refunds that have been issued so far in this fiscal year rose by 9.81% to Rs 1.35 lakh crore.

Gross direct tax collections (before deducting refunds) stood at Rs 7.99 lakh crore between April 1 and August 11, highlighting a 1.87% decrease from Rs 8.14 lakh crore in the corresponding period of the previous year.

Additionally, for the entire financial year 2025-26, the government has set a direct tax collection target of Rs 25.20 lakh crore, targeting a 12.7% rose over the previous year.

Further, the government is also planning to raise  Rs 78,000 crore from STT in the current fiscal.

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