The Union government’s gross direct tax collections contracted 1.9% to ₹7.99 lakh crore in the current financial year 2025-26 up to August 11, 2025, according to data released by the Central Board of Direct Taxes. Higher refunds also meant that net collections contracted 3.9% during this period.

The Centre’s gross direct tax collections for the previous financial year stood at ₹8.14 lakh crore till August 11, 2024. Notably, the shortfall in gross collections this year comes due to lower collections from the non-corporate tax category, which also includes income tax collections.

Non-corporate tax collections have fallen to ₹4.43 lakh crore in this financial year so far, down 8.3% from the ₹4.83 lakh crore collected in the same period of 2024-25. This category includes taxes paid by individuals, Hindu Undivided Families, firms, Associations of Persons (AoPs), Bodies of Individuals (BoIs), local authorities, and artificial juridical persons.

Gross corporate taxes, on the other hand, have increased marginally to ₹3.33 lakh crore so far this year, up from ₹3.08 lakh crore collected in the same period of 2024-25.

Higher refunds

Compounding the contraction in gross collections was the jump in refunds, which increased 9.8% during this period.

“The decline in the net collections is mainly due to the higher volume of refunds issued, especially for the corporate tax,” said Hitesh Sawhney, Partner at Price Waterhouse & Co LLP.

He added that tax collections do not always have a “one-way trajectory” of growth and are more dynamic on a month-to-month basis.

Net direct tax collections amount to ₹6.64 lakh crore in 2025-26 so far, down from ₹6.91 lakh crore in the previous year.