New Delhi37 minutes ago
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Net direct tax collection in the first seven months of financial year 2025-26 has been ₹12.92 lakh crore. This is 7% more than ₹ 12.07 lakh crore of the same period last year. But refunds declined by 17.7% to ₹2.42 lakh crore.
Both personal income tax (salaried and individuals) and corporate tax (companies) have a major share in net direct tax collections. It also includes STT.
Tax collection in April-October 2025
- Net Direct Tax: It has increased by 7% to Rs 12.92 lakh crore. Last year the net direct tax was Rs 12.07 lakh crore.
- Gross Tax Collection: It increased by 2.15% to Rs 15.35 lakh crore. Last year the gross tax collection was Rs 15.02 lakh crore.
- Refunds issued: Refunds worth ₹2.42 lakh crore were processed in the first seven months of FY2025. This is 17.72% less than last year’s ₹2.94 lakh crore.
- Securities Transaction Tax (STT): It was Rs 35,682 crore, which is slightly less than last year’s Rs 35,923 crore. These figures are till November 10, 2025.
Why did the collection increase and why did the refunds decrease?
The main reason for growth in direct taxes is better earnings of salaried people and small business owners. Despite tax rate cuts last year, personal income tax remained strong. Collection from non-corporate taxpayers is strong. There can be two reasons for reduced refunds:
- Due to increase in income of salaried class and small business owners, tax liability got balanced, thereby reducing the need for extra refund.
- The government is processing refunds more cautiously this year. Like verification was made strict, so that fraud claims could be prevented.
Positive impact on economy
These figures are positive for the economy, because direct tax revenue is increasing steadily. But flat STT indicates sideways trend in the stock market. Experts believe that this shows improvement in tax compliance, but refund delay can lead to trust issues.
In future, STT may increase due to IPO boom, which will further boost tax collection. The government’s plan is to make the tax system more digital so that refund processing is faster.
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