The numbers signal that despite global headwinds, current-year income and corporate profit growth are holding up firmly, and that the Centre may comfortably meet its budget target of 8% growth in direct tax collections for the current financial year, experts said.
“Direct tax collections continue to signal healthy underlying economic activity and the strength of the tax base,” said Richa Sawhney, partner, tax, at Grant Thornton Bharat. The steady growth in advance-tax payments remains a positive indicator of taxpayer confidence, business performance and expectations of sustained income growth, she added.
Advance tax payments, which are based on taxpayers’ assessment of their income for the year, are an early indicator of the health of the tax base and economic activity. Corporate advance tax jumped 18.09% to ₹4.16 lakh crore, from ₹3.52 lakh crore a year earlier, while non-corporate advance tax rose 9.24% to ₹1.06 lakh crore, from ₹96,904 crore.
Gross direct-tax collections, before adjusting refunds rose 15.19% to ₹14.32 lakh crore, while refunds jumped 29.19% to ₹2.20 lakh crore, according to the Central Board of Direct Taxes (CBDT). The increase in refunds was particularly sharp in the non-corporate segment, where they more than doubled to ₹81,439 crore from ₹39,866 crore.
“Despite these enhanced refunds, net tax collections have grown at a steady place with overall net tax collections remaining higher by ₹1.39 lakh crore,” said Hitesh Sawhney, partner at Price Waterhouse & Co LLP.
“The collections are showing both strength and resilience, driven by stronger gross tax inflows, enhanced compliance, and sustained economic and market activity.”Securities transactions tax (STT) collections rose 53% to ₹40,214 crore between April 1 and September 17, on the back of massive F&O (future and options) trading and increased retail participation.
“This seems to be primarily driven by rate hikes in Budget 2026 rather than an increase in turnover,” Rohinton Sidhwa, partner at Deloitte India said, citing a 150% increase in STT rates on equity futures effective April 1, 2026.