Net direct tax assortment slips 1.4% in first quarter of 2025-26

The decline was pushed by a pointy 58% leap in refunds to ₹86,385.31 crore throughout April-June 19, in contrast with ₹54,660.79 crore in the identical interval final 12 months, primarily attributable to larger company refunds.

“Refunds have elevated by 58.04% in comparison with the corresponding interval of final 12 months, reflecting higher taxpayer providers and faster issuance of refunds,” the Central Board of Direct Taxes mentioned.

Tax specialists attributed the dip in web collections to transitional elements, together with revised tax slabs and elevated enterprise investments somewhat than any structural weak spot.

“The marginal dip in web tax collections throughout the first quarter seems to be the results of anticipated transitional elements. The revised tax slabs and lowered private tax charges that got here into impact from April 1, 2025, have supplied reduction to salaried people, naturally mirrored in decrease TDS collections,” mentioned Samir Kanabar, tax accomplice at EY India.

Corporate tax refunds surged over 67.3% to ₹76,832.08 crore within the three months to June 19, up from ₹45,921.22 crore within the corresponding interval of 2024-25. In distinction, non-corporate tax refunds grew simply 9.44% to ₹9,551.11 crore from ₹8,727.28 crore.

Kanabar mentioned the upper company refunds mirrored elevated capital expenditure by companies. “As corporations spend money on enlargement and infrastructure, they profit from larger depreciation claims, which quickly decrease taxable earnings. This is a wholesome signal of forward-looking funding behaviour.”

Gross company tax collections rose 9.45% to ₹2,49,672.09 crore, however after accounting for refunds, web company tax fell 5.4% to ₹1,72,840.01 crore in contrast with ₹1,82,188.70 crore within the year-ago interval.

Non-corporate tax collections confirmed a distinct sample. Gross collections grew marginally lower than 1% to ₹2,82,262.41 crore, however with decrease refunds, web collections elevated about 1% to ₹2,72,711.30 crore in comparison with ₹2,70,779.31 crore.

Advance tax collections throughout the interval registered 3.87% development at ₹1.56 lakh crore. Corporate advance tax funds elevated 5.86% to ₹1,21,604.48 crore, whereas collections from non-corporate taxpayers declined 2.68% to ₹33,928.32 crore.

Non-corporate tax consists of funds by particular person taxpayers, Hindu Undivided Families, native authorities and synthetic juridical individuals. Advance tax is paid in 4 instalments throughout June, September, December and March of every monetary 12 months.

“A better quantity of company tax refunds processed within the first quarter supported liquidity throughout sectors. While this will likely weigh on short-term assortment figures, it additionally alerts administrative effectivity. We count on a extra balanced image to emerge in coming quarters,” Kanabar added.