Government's net direct tax collections grew 5.12% to over ₹23.40 lakh crore in 2025-26, but missed the revised target set for the fiscal year that ended March 2026.

In the revised estimates (RE) for the 2025-26 fiscal, the government lowered the direct tax collection target to ₹24.21 lakh crore. The original budget estimate was set at ₹25.20 lakh crore.

The government subdued direct tax collection in FY'26 follows the income tax cuts that were announced in the 2025-26 budget on February 1, 2025.

Finance Minister Nirmala Sitharaman hiked the income tax rebate to ₹12 lakh effective April 1, 2025, from ₹7 lakh earlier. She also brought in across-the-board changes in tax rates and slabs and hiked the standard deduction to ₹75,000. The move was aimed at leaving more money in the hands of taxpayers to boost demand in the economy.

The RE includes corporate tax collection of ₹11.09 lakh crore and income tax (including STT) of ₹13.12 lakh crore. The net corporate tax mop-up in FY'26 grew 11.4% to ₹10.99 lakh crore. Non-corporate tax collection was flat at ₹11.83 lakh crore.

Non-corporate tax includes taxes paid by individuals, Hindu Undivided Families, firms, associations of persons, bodies of individuals, local authorities, and artificial juridical persons. The securities transaction tax (STT) collection was up 7.9% to ₹57,522 crore, according to the data released by the Central Board of Direct Taxes (CBDT).

Net direct tax collection (including corporate and non-corporate tax) came in at ₹23.40 lakh crore in FY26, registering a 5.12% growth over ₹22.26 lakh crore collected in FY25.

Refund issuance dipped 1.09% year-on-year to ₹4.71 lakh crore in 2025-26.

Gross direct tax collection during the recently concluded fiscal stood at about ₹28.12 lakh crore, up 4.03% from the 2024-25 fiscal.

EY India Tax Partner Jayesh Sanghvi said non-corporate tax collections were expected to be affected by the personal income tax rate reductions in the Budget.

"Healthy corporate tax growth and refund management have helped the overall growth at 5.12%," Sanghvi said.

Deloitte India Partner Rohinton Sidhwa said non-corporate tax revenues have surprisingly remained stable despite a significant rate cut. This is the largest component of direct tax collections, and it reflects both growth in volumes and in the number of taxpayers.

(Except for the headline, Fortune India has not edited the content of this PTI report.)