India's net direct tax revenue rises 23% to 8.1 trillion rupees

India's net direct tax revenue surged 23% year-on-year to 8.1 trillion rupees ($97.2 billion) in the fiscal year ended March 31, government data showed on Monday.

The increase outpaced earlier estimates and reflected stronger-than-expected collections from corporate and personal income taxes, which offset a modest decline in securities transaction tax receipts. The revenue figure exceeded the revised budget target of 7.8 trillion rupees set in February, underscoring robust economic activity and improved compliance.

Direct taxes, which include income tax and corporate tax, account for over half of India's total tax receipts. The government had budgeted for 1.4 trillion rupees in direct tax mop-up in the final quarter of the fiscal year, but actual collections reached 1.7 trillion rupees, according to the finance ministry.

The buoyancy in tax revenue comes amid signs of resilient domestic demand and a recovery in corporate earnings, despite global economic headwinds. Analysts attributed the growth to higher formalization of the economy, improved audit mechanisms, and sustained economic momentum in key sectors such as manufacturing and services.

The provisional data, released by the Central Board of Direct Taxes, does not include state-level tax collections. The government is expected to release a detailed breakdown of tax sources in the coming weeks, including data on refunds issued and advance tax payments received.

Finance Minister Nirmala Sitharaman is scheduled to present the full-year budget for fiscal 2025-26 on July 23, where tax revenue projections will be a key focus amid ongoing fiscal consolidation efforts.