In Lok Sabha, the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, answered Unstarred Question No. 2484 on Monday, 3 August 2026/12 Shravana, 1948 (Saka), on “Direct Tax Collection.” The question was raised by Thiru Dayanidhi Maran, Member of Parliament.
The Minister informed the House that gross direct tax collections during Financial Year 2026-27, from 1 April 2026 to 13 July 2026, stood at ₹7,73,912.97 crore at the all-India level. Refunds amounting to ₹1,25,837.43 crore were issued during the period, resulting in net direct tax collections of ₹6,48,075.54 crore.
During the same period, Tamil Nadu recorded gross direct tax collections of ₹46,545.84 crore. After the issuance of refunds amounting to ₹9,362.89 crore, the State’s net direct tax collections stood at ₹37,182.95 crore.
Measures supporting growth in direct tax collections
The Government stated that several policy, administrative and technology-driven measures have contributed to improved direct tax compliance and collections.
The new Form 26AS provides taxpayers with consolidated information relating to tax deducted or collected at source, Statements of Financial Transactions, tax payments, demands, refunds and pending or completed proceedings. Availability of such information enables taxpayers to review their financial transactions and encourages accurate disclosure of income.
The facility for filing an updated Income-tax Return has also been introduced to promote voluntary compliance and reduce litigation. Under Section 139(8A) of the Income-tax Act, a taxpayer may update a return within two years from the end of the relevant assessment year by voluntarily reporting omissions or mistakes and paying the applicable additional tax.
The Income Tax Department receives information on different types of financial transactions from reporting entities. Under the e-Verification Scheme, this information is shared with taxpayers, who are provided an opportunity to correct inaccuracies or furnish missing details before scrutiny. This approach promotes voluntary correction and compliance.
The scope of TDS and TCS provisions has also been expanded to cover transactions such as large cash withdrawals, foreign remittances, purchase of luxury cars, e-commerce transactions, sale of goods, acquisition of immovable property, remittances under the Liberalised Remittance Scheme and purchase of overseas tour programme packages. These measures have helped bring eligible new taxpayers into the direct tax system.
Measures supporting formalisation and growth of MSMEs
The Government has undertaken several measures to improve the ease of doing business and reduce the compliance burden on enterprises, particularly Micro, Small and Medium Enterprises.
The Udyam Registration Portal, launched on 1 July 2020, provides a fully online, paperless and self-declaration-based registration process. The portal has application programming interface integration with various departmental platforms, including CBDT systems.
For informal micro-enterprises that are exempt from GST, the Udyam Assist Platform was launched on 11 January 2023. The formalisation initiative provides such enterprises with an identity and enables them to access benefits under various schemes, subject to the applicable eligibility conditions.
The Government has also revised the definition and threshold criteria for MSMEs by adopting a composite framework based on investment and annual turnover. The limits were further enhanced in 2025 to facilitate the growth and expansion of the MSME ecosystem.
Securities Transaction Tax and market participation
The Minister informed the House that Securities Transaction Tax rates applicable to transactions ordinarily undertaken by retail investors and small traders—such as the purchase and sale of equity shares and units of business trusts involving actual delivery—have remained unchanged since the Finance Act, 2012.
The STT rate on the sale of units of equity-oriented funds has similarly remained unchanged since the Finance Act, 2013. The revisions introduced through the Finance Act, 2026 primarily relate to futures and options transactions.
During Financial Year 2025-26, the National Stock Exchange accounted for 91.6 per cent of overall futures and options turnover, combining futures turnover and options premium turnover.
Following the increase in STT with effect from 1 April 2026, an analysis of year-on-year NSE data indicated that the total volume across all categories of market participants remained 16.2 per cent higher. The Government further stated that there is presently no proposal to review the existing STT structure.
Faster refunds and improved digital tax services
Strengthening tax administration through faster processing of refunds and improved digital services is a continuous and ongoing process.
The Government has undertaken technological upgrades, accelerated the processing of Income-tax Returns and strengthened validation rules. Taxpayers are also informed about shortcomings that may delay refunds, including the non-furnishing of a validated bank account for credit of the refund amount.
These initiatives are aimed at promoting voluntary compliance, reducing the compliance burden, ensuring timely processing of returns and refunds, and improving the overall quality of digital taxpayer services.
The answer can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/08/LS-Direct-Tax-Collections-03.08.2026.pdf
