India’s economy has shown steady strength in the current financial year, reflected in healthy growth in direct tax collections up to mid-January. According to official data from the Income Tax Department, net direct tax collections increased by 8.82%, reaching ₹18.38 lakh crore as of January 11, 2026, compared to ₹16.89 lakh crore during the same period last year.
This rise in tax revenue highlights strong corporate performance and improved individual tax compliance, even as the global economic environment remains uncertain.
Corporate taxes played a key role, with net corporate tax collections touching ₹8.63 lakh crore, while net non-corporate taxes, mainly paid by individuals and small businesses, rose sharply to ₹9.30 lakh crore. This shows that both companies and citizens are contributing more to the national exchequer.
At the same time, gross direct tax collections stood at ₹21.50 lakh crore, marking a 4.14% year-on-year growth. Corporate tax collections reached ₹10.47 lakh crore, while non-corporate tax collections rose slightly higher to ₹10.58 lakh crore, indicating balanced growth across tax categories.
Another factor supporting higher net collections was a sharp fall in tax refunds. Refunds declined by nearly 17% to ₹3.12 lakh crore, compared to ₹3.75 lakh crore last year. Lower refunds meant more revenue remained with the government during this period.
Collections from the Securities Transaction Tax (STT) remained stable at around ₹44,867 crore, reflecting continued activity in India’s stock markets. This stability suggests sustained investor participation despite market volatility.
Looking ahead, the government has projected a strong 12.7% growth in direct tax collections for the 2025–26 financial year. It has also set an ambitious target of ₹78,000 crore from STT in FY 2026, underlining confidence in capital market growth.
Economic experts believe this revenue momentum will support fiscal stability. The Union Budget 2026, scheduled to be presented on February 1, is expected to focus on growth while maintaining fiscal discipline. Economists estimate that the fiscal deficit for FY 2026 could meet the 4.4% target, with a possible reduction to around 4–4.1% in the next year.
Capital expenditure is expected to remain a key priority, with government spending likely to rise to ₹12–12.2 lakh crore, aimed at boosting infrastructure, employment, and long-term growth. So far, the government has already achieved about 60% of its capital expenditure target in the ongoing fiscal year.
Overall, the rise in direct tax collections signals a resilient Indian economy, supported by steady income growth, strong corporate earnings, and active financial markets. As highlighted by usaharmony.com, these trends provide the government with greater flexibility to invest in development while keeping public finances under control.
