With strong growth from corporate side, advance tax collection after the first two instalments jumped over 16 per cent, data made public by the Income Tax Department on Friday showed. Meanwhile, overall net direct tax collection rose by around 13 per cent.
According to data, while advance tax from companies grew by 18 per cent, collection from non-corporate taxpayers (includes taxes paid by individuals, Hindu undivided families, firms, association of persons, body of individuals, local authorities and artificial juridical persons) increased by a little over 9 per cent.
The due date for the second instalment of advance tax was September 15. Advance tax data is one key indicator to gauge the economy, especially the corporate sector. Advance tax needs to be paid by an assessee if her/his total estimated tax liability for the financial year exceeds ₹10,000 after adjusting for tax deducted at source (TDS) and tax collected at source (TCS).
It is applicable to all taxpayers earning income in India, including salaried individuals, freelancers, consultants, professionals (like doctors and lawyers) and business owners. It needs to be paid in four instalments (due dates: June 15, September 15, December 15, and March 15). However, individuals aged 60 years or older are exempt from paying advance tax only if they do not have any income from a business or profession.
Meanwhile, among the net direct tax collection, the corporate sector recorded a growth of over 19 per cent, while for non-corporate, it was over 6 per cent. However, securities transaction tax hogged the limelight with over 58 per cent growth.
Broad-based buoyancy
An tax expert said the buoyancy is broad-based. Nominal GDP for Q1 FY 2026-27 grew 10.3 per cent (MoSPI, 31 August 2026), and the Budget 2026-27 assumes full-year nominal growth of 10.0 per cent. Against that baseline, gross direct tax buoyancy runs at roughly 1.47, and net buoyancy at 1.26, a meaningful reversal from FY 2025-26, when net direct tax growth (per revised estimates cited in the PRS Union Budget 2026-27 Analysis) had trailed nominal GDP after the income tax rate cuts of the previous year.
“Non-corporate tax now accounts for 48.7 per cent of the gross pie versus corporate tax’s 48.5 per cent. Two structural forces may be inferred: rising formalisation of the workforce, and the fact that this is the first September instalment paid under the Income Tax Act, 2025. The 52.87 per cent surge in STT is a proxy for equity-market turnover and personal capital-gains liabilities,” he said, while expecting overall collection to exceed the budget estimates.
According to another tax expert direct tax collections continue to signal healthy underlying economic activity and the strength of the tax base. While higher refunds have moderated net tax collection growth, they also reflect improved efficiency in refund processing, ensuring timely relief and liquidity for taxpayers. “The steady growth in advance tax payments remains a positive indicator of taxpayer confidence, business performance and expectations of sustained income growth,” she said.
Source from: https://www.thehindubusinessline.com/economy/advance-tax-collection-rises-over-16/article71480132.ece
