Net direct tax collections rose 14.64% year-on-year to ₹5.21 trillion as of 17 June, outpacing the government’s full-year budgeted growth and signalling a strong start to fiscal 2027 (FY27). Gross collections climbed 12.46% to ₹6.10 trillion, while refunds edged up 1.19% to ₹890.26 billion, the income tax department said on Thursday.
Corporate tax receipts led the expansion, with net collections jumping 22.48% to ₹2.08 trillion, while non-corporate collections grew 8.41% to ₹2.93 trillion. Securities Transaction Tax receipts surged 44.9% to ₹188.56 billion, reflecting sustained buoyancy in equity markets after strong FY26 corporate results.
Advance tax collections, an early gauge of business confidence, rose 15.30% to ₹1.78 trillion for FY27, with corporate advance tax up 16.01% to ₹1.40 trillion. Tax experts at EY and Deloitte said the data marked a reversal of the tepid growth seen in the same period last year and indicated the corporate sector was recovering momentum.
“The growth in advance tax collections indicates a reversal of the tepid growth seen in the corresponding period last year for both corporate and non-corporate taxpayers. This is a forward indicator of business confidence. Interestingly, the sharp growth in collections stands out, indicating continued heightened market activity following strong corporate results for FY2025-26,” said Jayesh Sanghvi, tax partner, EY India.
According to Rohinton Sidhwa, partner, Deloitte India, strong tax collections suggest the government is on track to meet its fiscal deficit target for FY27.
“Overall, it appears that tax collections have shrugged off the degrowth caused by the previous year’s rate cut and once again resumed the growth path. The data also shows strong advance tax growth from companies, indicating the corporate sector is doing well,” said Sidhwa.
Early data lifts confidence on fiscal consolidation
The robust early revenue performance matters for the government’s fiscal calculations. New Delhi has targeted a of 4.4% of the GDP (gross domestic product) for FY27, tighter than the revised 4.8% in FY26. Stronger direct tax flows could ease pressure on spending plans, including capital expenditure, while the World Bank this month raised India’s FY27 growth forecast to 6.6% from 6.5% and Goldman Sachs revised its current account deficit projection down to 1.3% of GDP.
In its June 2026 Global Economic Prospects report, the World Bank revised its FY27 growth forecast for India upward to 6.6% from 6.5% projected in January, making it one of the fastest-growing major economies despite a moderation from the estimated 7.7% growth in FY26.
The improving revenue outlook also coincides with a strengthening macroeconomic backdrop. Goldman Sachs recently lowered its forecast for the current account deficit () for 2026 to 1.3% of GDP from 2% previously and projected a balance of payments (BoP) surplus of 0.6% of GDP after two years of deficits.
Tax experts noted that the data indicate a strong start to FY27, with advance tax collections pointing to healthy business activity and profitability. They noted that corporate advance tax payments grew faster than non-corporate collections, while the sharp rise in STT collections reflected continued strength in equity market activity. The healthy growth in net tax collections could also support the government’s fiscal consolidation efforts during the year.
“The direct tax collection numbers as of 17 June 2026, reflect an encouraging start to the fiscal year with gross collections rising 12.46% and net collections growing 14.64% YoY. While net corporate tax has registered an optically strong performance at 22.44% growth, part of this reflects the continued restrained pace of refund disbursals, a trend visible in the previous year as well. Adjusted for this, the underlying gross corporate tax movement remains steady, pointing to corporate resilience and improved first-quarter advance tax compliance, which rose 16.01% for corporate tax collections and 15.30% overall,” Hitesh Sawhney, partner, Price Waterhouse & Co LLP, said.
Taken together, these indicators suggest that FY27 has commenced on a firm and promising footing, supported by steady corporate performance and improving compliance trends, he added.
The data pertains to collections up to 17 June and includes taxes paid by both corporate and non-corporate taxpayers, such as individuals, Hindu Undivided Families (), firms, associations of persons, and local authorities.