MACROECONOMICS

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CBS LINE

Volume 3(11)

India’s net direct tax collection up 7% in FY26 so far to Rs 12.92 lakh crore

India has recorded a notable rise in its direct tax collections for the current financial year. According to the latest data, the government has collected ₹12.92 lakh crore in net direct taxes during the April to November period, reflecting a 7% increase compared to the same duration last year. Direct taxes mainly include Income Tax paid by individuals and Corporate Tax paid by companies.

This growth suggests that businesses are earning profits and individuals are reporting more taxable income. Another factor influencing this rise is that refunds issued to taxpayers have been lower this time, which increases the net tax amount retained by the government.

Direct taxes are an important source of revenue for the government. When these collections increase, the government gains more financial flexibility to spend on public services, infrastructure, welfare schemes, and development programs, without relying too heavily on borrowing. Steady tax inflow is often viewed as an indication of a stable and growing economy.

However, it is important to understand that while the numbers are encouraging, the pace of growth is still moderate. The increase in collections is partly due to fewer refunds rather than a big jump in income growth. This means that while the economy is moving forward, the momentum is cautious. Economists suggest that for stronger and more sustained growth, income levels must rise more visibly and businesses must continue to expand.

The rise in direct tax collections is a positive sign for India’s fiscal health. It reflects better compliance, earnings, and stability in the economy. At the same time, continued policy support and economic reforms will be necessary to maintain and strengthen this upward trend.

Ahmad Swalih

Econometrics and Financial Technology

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