Net direct tax mop-up rises 5% to ₹23.4 tn, misses revised aim

New Delhi: The government collected ₹23.4 trillion in direct taxes after adjusting for refunds in FY26, posting a 5% annual growth but missing its lowered revised target for the year, official data released on Monday showed.

In the Union budget for FY27, presented on 1 February, the government had lowered its net direct tax revenue target for FY26 by just below ₹1 trillion to ₹24.2 trillion. This implies a 3.3% shortfall in tax receipts from the revised estimates.

Within direct taxes, the government collected ₹10.99 trillion of corporate tax during the fiscal year, 11.4% higher than FY25. This mop-up from companies is higher than the year's original target, but slightly lower than the subsequent upwardly revised figure.

Personal income tax, collected from individuals, which comprise most of the ‘non-corporate’ tax receipts were at ₹11.83 trillion in FY26, the government data showed. The figure is a notch above the FY25 mop-up, but well below the ₹13.12 trillion revised target for FY26.

The government said it issued ₹4.71 trillion in tax refunds to individuals and companies in FY26, a notch below the refunds of a year ago.

For FY27, the government has a direct tax collection target of ₹26.97 trillion. Factoring in the FY26 direct tax collection figures, this implies a challenging 15.2% growth requirement for the year.

Experts said the government's direct tax collections were on expected lines—largely flat. Rohinton Sidhwa, partner at Deloitte India said personal income tax revenues have surprisingly been afloat in spite of a very significant cut in tax rates. This is the largest component under direct taxes, and it reflects a growth in the collection amount as well as in the number of tax payers, said Sidhwa.

In the FY26 budget, the government had restructured personal income tax slabs and rates and offered a rebate for individuals earning up to ₹12 lakh annually to boost household consumption, savings, and investments.