Advance tax collections in India have witnessed a remarkable surge, reaching Rs 10.45 lakh crore as of March 2025, marking a 14.6% increase compared to the previous fiscal year. This figure reflects the financial health of corporations and individuals alike, as the corresponding amount for last year stood at Rs 9.11 lakh crore. The data underscores the growing economic momentum in the country.

Trends in Advance Tax Collections

The last date for the advance tax payment for fiscal year 2025 was set for March 15, 2025. Interestingly, the growth rate for advance tax collections in the fourth quarter has slowed to 2.4%, a drop from 16.8% in the third quarter. Earlier in the year, first and second quarters recorded impressive growth rates of 27% and 20.6%, respectively.

• Q1 Growth: 27%
• Q2 Growth: 20.6%
• Q3 Growth: 16.8%
• Q4 Growth: 2.4%

Direct Tax Collections on the Rise

According to the finance ministry’s latest report, the Centre’s direct tax collections, after adjusting for refunds, have climbed to Rs 21.3 lakh crore, reflecting a 13.1% year-on-year increase for FY25. As of March 16, these collections accounted for 95% of the revised estimates for the fiscal year.

• Corporate Tax (CIT) collections rose by 12.5%, totaling Rs 7.57 lakh crore.
• Personal Income Tax (PIT) collections saw a significant jump of 20.5%, reaching Rs 2.87 lakh crore.

In contrast, corporate tax collections post-refunds grew by 7.1%, slightly below the 7.6% predicted in the revised estimates. Notably, collections from the Securities Transaction Tax (STT) soared nearly 56%, amounting to Rs 53,095 crore this fiscal year.

Refunds and Projections

During this period, the government issued refunds exceeding Rs 4.60 lakh crore, compared to Rs 3.47 lakh crore in the same timeframe the previous year. The gross direct tax collection until March 16 experienced a robust 16.2% increase, reaching Rs 25.87 lakh crore.

In the revised estimates for the current fiscal, the government has set the income tax collections target at Rs 12.57 lakh crore, an increase from the budget estimate of Rs 11.87 lakh crore. The projection for STT collections stands at Rs 55,000 crore, surpassing the earlier budget estimate of Rs 37,000 crore.

However, corporate tax collection targets have been adjusted downward to Rs 9.80 lakh crore, from an earlier target of Rs 10.20 lakh crore. Overall, the revised estimates project total direct tax collections at Rs 22.37 lakh crore, slightly up from Rs 22.07 lakh crore in the budget estimates.

Expert Insights

Rohinton Sidhwa, a partner at Deloitte India, commented on the trends, stating, “The latest figures indicate a healthy growth trajectory in personal taxes and STT. This suggests a shift towards increased reliance on personal tax revenues compared to corporate taxes.”

Hitesh Sawhney, a partner at Price Waterhouse & Co, noted, “The impressive direct tax collections by March 2025 highlight the government’s effective fiscal policies, including the Direct Tax Vivad Se Vishwas Scheme 2.0 and extended filing periods for updated returns, which have greatly enhanced taxpayer compliance and satisfaction.”

This comprehensive overview of advance tax collections reflects not just numbers but the underlying economic vitality of India as it navigates its fiscal landscape.