The March-quarter (Q4 FY26) instalment of advance taxes expectedly lagged the year-ago growth by a wide margin, causing the overall growth in direct tax receipts so far to fall marginally short of the revised estimates (RE).
According to data released by the Central Board of Direct Taxes (CBDT), the Centre’s advance tax collections for Q4 FY26 from companies, LLPs and individuals rose by 6.42% on year, compared with a 14.62% growth seen in the year-ago quarter. This was owing largely to the massive personal income tax relief announced in the Budget FY26. In absolute terms, Q4 advance tax collections stood at Rs 11.13 lakh crore as on March 17.
Budget Effect
While advance taxes paid by corporate assesses rose nearly 9.54% to Rs 8.29 lakh crore in Q4, collections from the non-corporate sector declined 1.78% to Rs 2.83 lakh crore. The non-corporate tax includes those paid by individuals, HUFs, firms, local authorities, artificial juridical persons, etc.
According to the CBDT data, direct tax collections after refunds between April 1 to March 17 recorded a growth of 7.19% year-on-year, compared with a projected growth target of 9% (revised estimates) over FY25 actuals for the whole of FY26.
The collections after refunds reached Rs 22.80 lakh crore. The corporate tax collections were Rs 10.91 lakh crore and the non-corporate tax collection, Rs 11.32 lakh crore. Significantly, refunds declined 5.86% year-on-year to Rs 4.34 lakh crore.
Chasing the Target
Corporate tax receipts after refunds rose by 12.75% against the projected growth rate of 12.4% (revised estimates), while personal income tax (PIT) collections grew by 2.7% against the revised target of 6.2% for FY26.
Icra chief economist Aditi Nayar said that while the growth in advance tax for corporate taxes appears relatively healthy. Icra is watchful of the unfolding impact of the West Asia crisis on availability and pricing of inputs as well as profitability in certain sectors.
Vikas Sharma, Lead-Personal Tax, AKM Global, said the upward trend in direct tax collections indicates sustained economic activity and improved tax compliance.
Please click here to view the full story on Financial Express.