Net Direct Tax falls 1.34% amid surge in refunds

India's net direct tax collections fell 1.34% to Rs 5.63 lakh crore in the current financial year up to July 10, largely due to a rise in refunds, according to official data released on Friday.According to information, the fall in net collections comes despite an increase in gross receipts. The gross direct tax collections during the April 1 to July 10 period stood at Rs 6.65 lakh crore, registering a year-on-year growth of 3.17% over Rs 6.44 lakh crore recorded in the same period last year. However, higher disbursals of tax refunds, which surged by 38% to Rs1.02 lakh crore, pulled down the net collection.
The net corporate tax collection stood at Rs 2 lakh crore, while non-corporate taxes which include income tax from individuals, Hindu Undivided Families (HUFs), and firms contributed Rs 3.45 lakh crore. Additionally, the mop-up from Securities Transaction Tax (STT) was reported at Rs 17,874 crore during the same period.Total net direct tax collection in the corresponding period of the previous year was Rs5.70 lakh crore.For FY26, the government has set a direct tax collection target of Rs 25.20 lakh crore, reflecting a 12.7% increase over the previous fiscal. Of this, Rs 78,000 crore is expected to come from STT collections,according to information.The latest figures reflect the impact of early and higher refunds issued by the income tax department, which is part of the government's push for faster processing and resolution of tax claims.

(Business Correspondent)