Archive · 17 Jun 2025
India's Advance Tax Collections Slow in Q1 FY26
Imagine the government gets money from taxes paid by companies and people.
Recently, the amount of tax money coming in grew, but it grew much slower than before.
This is because the government changed the tax rules, letting people pay less tax.
Some people are paying less income tax, but companies are paying a bit more.
Overall, the government is collecting less tax money than they planned.
Also, the government is giving back more tax refunds than last year, trying to speed up the process.
This could mean the government might not get as much tax money as they expected.
Advance direct tax collections grew by 3.6% in Q1 FY26, significantly lower than the 27% growth in the previous year.
Personal income tax fell by 4%, while corporate advance tax rose by 6% in Q1 FY26.
Overall direct tax collections decreased by 1.5% year-over-year as of June 16, 2025.
The government increased the income tax exemption limit, potentially impacting tax receipts.
Direct tax refunds grew sharply by 61% year-over-year, influenced by efforts to expedite refunds.
- Who
- The Centre (government) and taxpayers (companies, LLPs, and individuals).
- What
- Advance direct tax collections increased by 3.6% in Q1 FY26.
- When
- As of June 16, 2025, for Q1 FY26.
- Where
- India
- Why
- Due to changes in tax regime (higher exemption limits) and increased tax refunds.
Government's Perspective
Analysts' Perspective
Tax Relief vs. Revenue
Government's Perspective
Implementing Income Tax Relief Measures
Analysts' Perspective
Concern over Reduced Tax Receipts
- Advance Tax Receipts (FY26)
- Rs 1,54,126 crore (as of June 16)
- Advance Tax Receipts (FY25)
- Rs 1,48,823 crore (as of June 16)
- PIT Advance Tax Growth (Q1FY26)
- -4%
- Corporate Advance Tax Growth (Q1FY26)
- 6%
- Direct Tax Refunds Growth
- 61% YoY
- Overall Direct Tax Collection Drop
- 1.5% YoY as of June 16, 2025