India’s net direct-tax collections rose nearly 13% year-on-year to ₹12.12 lakh crore between April 1 and September 17, giving the government a strong revenue start to the current financial year as corporate tax payments accelerated.

Gross direct-tax collections, before adjusting for refunds, climbed 15.19% to ₹14.32 lakh crore over the same period, according to Income Tax Department data. Refunds increased much faster, rising 29.19% to ₹2.20 lakh crore, which brought the net collection figure down to ₹12.12 lakh crore.

The strongest growth came from corporate taxes. Net corporate tax collections increased 19.5% to around ₹5.56 lakh crore, while net non-corporate tax collections, which include personal income tax and taxes paid by firms and other entities, grew by about 6% to ₹6.16 lakh crore. The divergence suggests that corporate profitability is currently contributing more heavily to the increase in government revenue than individual taxpayers.

Advance tax payments provided another positive signal. Total advance tax collections rose 16.18% to ₹5.22 lakh crore, with corporate advance tax payments increasing 18.09% to ₹4.16 lakh crore. Non-corporate advance tax collections rose 9.2% to roughly ₹1.06 lakh crore. Because advance taxes are paid on expected earnings during the financial year, stronger collections can provide an early indication of business profitability and income growth.

Securities Transaction Tax collections also jumped sharply, rising nearly 53% to more than ₹40,200 crore. Part of that increase reflects higher STT rates on derivatives that took effect from April 1 under the 2026-27 Budget, rather than simply an increase in market turnover.

The latest numbers put direct-tax revenue growth ahead of the government’s full-year assumptions. The Union Budget estimates total direct-tax receipts of ₹26.97 lakh crore for FY2026-27, implying growth of around 11.4% over the previous year. By September 17, the government had already collected roughly 45% of that target on a net basis.

That matters because tax collections are central to the Centre’s effort to reduce the fiscal deficit while maintaining high levels of public investment. The government has budgeted total expenditure of ₹53.47 lakh crore for the year, including ₹12.22 lakh crore in capital expenditure, while targeting a fiscal deficit of 4.3% of GDP.

The stronger tax performance also coincides with relatively robust economic growth. India’s GDP expanded 7.8% year-on-year in the April-June quarter, and several forecasters have subsequently raised their growth expectations for the year.

Still, the pace of collections will need to remain strong through the second half. Higher oil prices, inflation and a weaker global environment could slow corporate earnings and household income growth, while the sharp rise in refunds is also reducing the gap between gross and net collections.

For now, however, the numbers suggest that the government’s direct-tax revenue is running ahead of the growth rate assumed in the Budget, with corporate earnings providing much of the momentum.