Direct Tax collection numbers at the first quarter stage (June Quarter) or at the end of any other quarter do indicate generally the broad trajectory of the annual tax revenue growth and the relative ease or strain with which the revenue targets can be met.
Revenue targets for the financial year 2025-26 (FY26) are ₹10.82 lakh crore of Corporation Tax against Revised Estimates (RE) of ₹9.80 lakh crore for FY 2024-25; and ₹14.38 lakh crore of Income Tax against RE of ₹12.57 lakh crore for FY 2024-25. Overall, direct tax targets for FY 2025-26 are 12.65% over the RE for 2024-25.
The first quarter numbers for direct tax include the 15% advance tax payments due by June 15 and the TDS collections for April, May and June. These two streams carry the bulk of the direct tax collection whether at the first quarter stage or on an annual basis.
CBDT’s press release on direct tax collections at the first quarter stage for FY 2025-26 (as on 19-6-25) shows the net collections recede by 1.39% year-on-year (YoY), while gross collections have grown by 4.86%. Overall, advance Tax for companies grew by 5.86% YoY and advance tax for non-corporates fell by 2.68%. Also, refunds rose by 58.04% YoY.
Leaving the aspect of refund from any analysis on direct tax growth since the refund outgo is not amenable to statutory discretion for withholding on mass scale etc., except in few specific situations, it always has been more appropriate to look at the gross collection numbers at any stage of the FY to make reasoned projections for the whole year. In that light, below what the gross collection number looked like at the 1st quarter stage and at the year- end for the last 5 years, and what statistically could be the message getting conveyed:
| FY | Gross Collection Growth at the 1st Quarter Stage YoY | Gross Collection YOY at the Year End |
| 2021-22Â | 57%Â | 35.6%Â |
| 2022-23Â | 40%Â | 20%Â |
| 2023-24Â | 12.73%Â | 18.6%Â |
| 2024-25Â | 22.19%Â | 15.59%Â |
| 2025-26 | 4.86% | ? |
One, the percentage of increase in gross collection at the first quarter stage for FY 2025-26 is the lowest among the last 5 years.
Two, generally, the growth in gross collection at the year-end is lesser than the growth in the gross collection at the end of first quarter.
Three, since net collections have receded by 1.39% by the first quarter for FY 2025-26, net collections need to grow in excess of 15% for the next 3 quarters to achieve the Budget Estimates (BE) target of growth of direct tax and not by the original growth projections of 12.65%.
Direct tax dispensation should be looking ahead to the three forthcoming quarters and the tax payment obligations attached with each of these 3 quarters to turn things around.
—The author, JB Mohapatra, is former Chairman, Central Board of Direct Taxes. The views are personal.
Source from: https://www.cnbctv18.com/access/opinion/first-quarter-direct-tax-collection-indication-cbdt-jb-mohapatra-19644940.htm
