New Delhi: Net direct tax collections rose 12.96% year-on-year to ₹12.12 trillion as of 17 September of fiscal year 2027, as per the income-tax department’s provisional data released on Friday.
Gross direct tax collections grew 15.19% to ₹14.32 trillion a year earlier. The higher gross collections were partly offset by a sharp rise in refunds, which increased 29.19% to ₹2.20 trillion from ₹1.70 trillion.
Net corporate tax collections, after accounting for refunds, increased 19.48% to ₹5.56 trillion, the data showed. Gross corporate tax collections rose 16.58% to ₹6.95 trillion.
The stronger corporate tax numbers point to a relatively robust flow of tax payments from companies in the first half of FY27. Corporate advance tax, which reflects payments against estimated current-year tax liability, grew 18.1%, nearly twice the 9.2% growth recorded in the non-corporate segment.
As the second quarter of FY27 draws to a close, the growth in tax collections points to strong revenue mobilization in the early months of the fiscal year, outpacing the growth assumed for the broader economy in the Union budget.
The data are significant for the government’s finances because direct taxes are a major source of revenue for funding expenditure and for keeping the fiscal deficit on track. The FY27 has pegged the Centre’s net tax revenue at ₹28.67 trillion, while gross direct-tax collections, comprising corporation tax and taxes on income, are budgeted at ₹26.97 trillion.
The ₹14.32 trillion in gross direct tax collections was equivalent to roughly 53% of the ₹26.97 trillion budgeted for corporation tax and taxes on income for the full year.
The largest contribution came from non-corporate tax, which includes paid by individuals, Hindu Undivided Families (HUFs), firms, associations of persons (AOPs), bodies of individuals (BOIs), local authorities and artificial juridical persons.
Gross non-corporate tax collections, which include taxes paid by individuals, Hindu Undivided families, firms and other entities, rose 12.30% to ₹6.98 trillion. Net collections from this category increased 5.99% to ₹6.16 trillion, compared with ₹5.81 trillion a year earlier.
Collections from securities transaction tax (STT) rose sharply to ₹40,214 crore, from ₹26,306 crore in the corresponding period last year, an increase of about 53%.
Advance rose 16.18% to ₹5.22 trillion as of 17 September, from ₹4.49 trillion a year earlier.
Corporate advance tax grew 18.09% to ₹4.16 trillion, while advance tax paid by non-corporate taxpayers increased 9.24% to ₹1.06 trillion.
Advance tax payments provide an early indication of tax liabilities arising from estimated income during the financial year and are closely watched as an indicator of the pace of direct-tax mobilization.
Expert speak
According to Jayesh Sanghvi, tax partner, EY India, the growth in tax collections points to rising formalization of the workforce and comes against the backdrop of the first September advance-tax instalment under the Income-tax Act, 2025. “The 52.87% increase in securities transaction tax (STT) collections is indicative of higher equity-market turnover and could also reflect higher tax liabilities arising from capital-market gains,” he said.
“Faster refund processing is a taxpayer-service gain, but, if sustained, it could moderate net-collection growth in subsequent quarters. Overall, the numbers indicate a strong start to FY27 for direct-tax collections, leaving the government with room to exceed the Budget’s 8% growth assumption for gross tax revenue,” he said.
“While tax collections cannot by themselves be viewed as a direct measure of economic growth, the sustained increase in corporate and advance tax collections provides an indication of continued income and business activity during the period,” said Amit Maheshwari, managing partner, AKM Global, a tax and consulting firm.
“The 29.19% increase in refunds highlights the need to balance stronger revenue mobilisation with efficient processing of legitimate tax claims. Going forward, sustaining economic activity, broadening the tax base and strengthening technology-led compliance will remain important for maintaining the pace of revenue growth,” said Maheshwari.