Net direct tax mop-up dips 1.34% to Rs 5.63 lakh crore on higher refunds

New Delhi: Net direct tax collection fell 1.34 per cent to about Rs 5.63 lakh crore till July 10 of the current financial year, mainly on account of higher refunds, according to government data released on Friday.

Net corporate tax collection dropped 3.67 per cent to around Rs 2 lakh crore, from Rs 2.07 lakh crore in the year-ago period.

Non-corporate tax (which includes individuals, HUFs and firms) mop-up stood flat at Rs 3.45 lakh crore between April 1 and June 10, 2025. Securities transaction tax (STT) collection was Rs 17,874 crore till July 10.

Total net collections stood at Rs 5.63 lakh crore, registering a decline of 1.34 per cent over Rs 5.70 lakh crore collected in the year-ago period.

Net refunds issued so far this fiscal year jumped 38 per cent to Rs 1.02 lakh crore.

Gross collections (before refunds) stood at Rs 6.65 lakh crore from April 1-July 10, posting a 3.17 per cent growth over Rs 6.44 lakh crore in the year-ago period.

Gross corporate tax collection grew 9.42 per cent to about Rs 2.90 lakh crore, while gross non-corporate tax mop-up dipped 1.28 per cent to Rs 3.57 lakh crore till June 10.

Shardul Amarchand Mangaldas & Co Partner Gouri Puri said the decline in net direct tax collections is primarily due to a rise in the volume of tax refunds processed.

“This reflects the government’s focus on improving taxpayer services, as timely and efficient refund processing is a critical enabler of ease of doing business,” Puri said.

EY India Tax Partner Samir Kanabar said while a fall in net direct tax collection is largely driven by an increase in refunds issued this year, the overall fall in direct taxes can be explained by two major factors.

On the personal tax front, the revised slab structure continues to offer relief to a large base of taxpayers, resulting in reduced tax liability.

On the corporate side, higher capital expenditure has led to increased depreciation claims, thereby impacting immediate tax outflows.

“These measures, from expedited refunds to tax relief and capex incentives are aligned with the broader objective of stimulating economic activity and supporting long-term growth,” Kanabar added.

In the current fiscal year, the government has projected its direct tax collections at Rs 25.20 lakh crore, up 12.7 per cent year-on-year. The government has collected 22.34 per cent of its direct tax target till July 10. The government aims to collect Rs 78,000 crore from STT in FY26.