NEW DELHI: India’s net direct tax collections fell 4% year-on-year to 6.64 trillion rupees ($75.79 billion) between April 1 and August 11, as personal income tax cuts and a deferred payment deadline weighed on receipts.
Direct taxes, which include corporate and personal tax, fell nearly 2% year-on-year to 7.99 trillion rupees on a gross basis during the period, the income tax department said in a statement.
The government said it had issued tax refunds worth 1.35 trillion rupees during the period, about 10% higher than last year, it said.
India has projected a near 13% increase in direct taxes to 25.2 trillion in the financial year 2025-26.
The personal tax cuts announced in the budget along with benign inflation have led to lower collections, said Paras Jasrai, an economist at India Ratings.
The government has deferred the due date for filing tax returns, which could be another reason for the drop in tax collections, Jasrai said, adding that revenues will start seeing an uptick in October to December.
India in February announced cuts to personal income tax, saying individuals with annual earnings of up to 1.28 million rupees would be exempt from paying tax.
The government has also extended the last date for filing income tax to September 15 from July 31 earlier.
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