Advance tax collections from corporations, firms, and individuals reached ₹10.45 lakh crore in the current fiscal as of Sunday, reflecting a 14.6% year-on-year increase from ₹9.11 lakh crore in the same period last year. These collections serve as an indicator of corporate profitability and overall economic conditions.
The final installment for advance tax payments for FY25 was due on March 15, 2025. Growth in advance tax collections for Q4, as of March 16, slowed to 2.4% year-on-year compared to 16.8% in Q3. In Q1 and Q2, growth was recorded at 27% and 20.6%, respectively.
Net direct tax collections after refunds increased by 13.1% year-on-year to ₹21.3 lakh crore as of March 16, accounting for 95% of the revised estimates for FY25, according to data from the finance ministry.
Advance tax collections from corporate tax (CIT) rose by 12.5% to ₹7.57 lakh crore, while non-corporate collections, primarily from personal income tax (PIT), grew by 20.5% to ₹2.87 lakh crore.
CIT collections after refunds between April 1 and March 16 increased by 7.1% year-on-year, slightly below the 7.6% growth projected in the revised estimates. PIT collections grew by 17.3%, lower than the 20.3% estimated earlier. Collections from securities transaction tax (STT) saw a significant rise of nearly 56% to ₹53,095 crore.
Refunds issued during this period amounted to more than ₹4.60 lakh crore, up from ₹3.47 lakh crore in the previous year. Gross direct tax collections increased by 16.2% to ₹25.87 lakh crore as of March 16.
The revised estimates for FY25 place income tax collections at ₹12.57 lakh crore, up from the budget estimate of ₹11.87 lakh crore. The STT collection estimate was revised to ₹55,000 crore, compared to the initial target of ₹37,000 crore.
The corporate tax collection target was lowered to ₹9.80 lakh crore from the initial projection of ₹10.20 lakh crore. Overall, the revised estimate for direct tax collections stands at ₹22.37 lakh crore, up from the original budget estimate of ₹22.07 lakh crore.
According to Rohinton Sidhwa, partner at Deloitte India, the data highlights a growing reliance on personal taxes rather than corporate income tax. Hitesh Sawhney, partner at Price Waterhouse & Co, noted that the strong direct tax collections reflect the effectiveness of government fiscal policies, including initiatives like the Direct Tax Vivad Se Vishwas Scheme 2.0 and extended filing periods for updated returns, which have contributed to higher compliance and taxpayer satisfaction.
