Net direct tax collections rise nearly 15% to Rs 5.21 lakh crore; advance tax growth signals strong corporate earnings

Net direct tax collections rose 14.64% to over Rs 5.21 lakh crore as of June 17 in the current financial year, driven by robust advance tax payments from companies and higher securities transaction tax (STT) collections, according to government data released on Thursday, as reported PTI.The growth keeps the Centre on track to meet its ambitious direct tax target for FY27 and points to continued strength in corporate profitability and market activity.Net corporate tax collections increased 22% to Rs 2.08 lakh crore during the period, while net non-corporate tax (NCT) collections, which include taxes paid by individuals, HUFs and firms, rose 8% to about Rs 2.94 lakh crore.Collections from Securities Transaction Tax (STT) jumped 45% to Rs 18,856 crore.Advance tax collections, often seen as a key indicator of business performance, grew 15.30% to more than Rs 1.78 lakh crore. Corporate advance tax payments rose 16% to over Rs 1.40 lakh crore, while advance tax collections from non-corporate taxpayers increased 13% to Rs 37,620 crore.Refunds worth Rs 89,026 crore were issued till June 17, up 1.19% from the year-ago period.On a gross basis, direct tax collections increased 12.46% to over Rs 6.10 lakh crore. Gross corporate tax collections stood at more than Rs 2.76 lakh crore, while non-corporate tax collections were about Rs 3.15 lakh crore.The government has budgeted direct tax collections of Rs 26.97 lakh crore in FY27, implying a growth of 15% over the Rs 23.40 lakh crore collected in FY26.Deloitte India Partner Rohinton Sidhwa said overall it appears that tax collections have shrugged off the degrowth caused by previous years’ 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. While these are early indicators of the trends sustains it would help keep the government on its track of maintaining the fiscal deficit target,” Sidhwa said, PTI quoted.EY India Tax Partner Jayesh Sanghvi said the advance tax growth indicates a reversal trend from the tepid growth of corresponding period last year on both corporate and non-corporate.“This is a forward indicator of potential business confidence. Interestingly, the STT growth stands out indicating continued heightened market activity following from buoyant corporate results for FY 2025-26,” Sanghvi said.