During April 1-July 10, the net direct tax collection of the Indian government fell 1.3% year-on-year to 5.6 trillion rupees, said the Income Tax Department.
Direct taxes, which include corporate and personal tax, grew 3.2% to 6.6 trillion rupees on a gross basis during the period, the statement from the income tax department said. Tax refunds worth 1.01 trillion rupees were issued during the period, 38% higher than last year.
In June, the government reported that net direct tax collection saw a marginal decline of 1.39%, falling to Rs 4,58,822 crore from Rs 4,65,275 crore in the previous year.
During April 1–July 10, 2025, gross direct tax collections rose 3.17% to Rs 6,64,807 crore. This includes Rs 2,89,773 crore from corporate taxes, Rs 3,56,887 crore from non-corporate taxes, and Rs 17,874 crore from securities transaction tax.
According to the Economic Times, the total net direct tax mop-up stood at Rs 5,62,827 crore, compared to Rs 5,70,483 crore collected in the same period last year.
The decline was largely due to a sharp rise in tax refunds, which jumped by 38.01% to Rs 1,01,980 crore.
Net corporate tax collection stood around Rs 2 lakh crore, while non-corporate tax (which includes individuals, HUFs and firms) was at Rs 3.45 lakh crore. Securities transaction tax mop-up was Rs 17,874 crore between April 1 and July 10.
According to the Hindu BusinessLine, Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co, said the decline in net direct tax collections is primarily due to a rise in the volume of tax refunds processed. This reflects the government’s focus on improving taxpayer services, as timely and efficient refund processing is a critical enabler of ease of doing business.
Last month, Finance Minister Nirmala Sitharaman urged Principal Chief Commissioners of Income-tax (Pr.CCsIT) to prioritise making tax compliance simpler, more transparent and taxpayer-friendly, emphasising a structured, process-driven approach to enhance ease for taxpayers and improve voluntary compliance nationwide.
