NEW DELHI, Aug. 13 -- India's direct tax collections showed early signs of strain in the first five months of the ongoing fiscal year (2025-26), with higher refunds tempering revenue growth, data from the Income Tax Department showed on Tuesday. Net collections, spanning corporate tax, non-corporate tax, securities transaction tax, and other levies, stood at Rs.6.64 lakh crore, down 3.95% from Rs.6.91 lakh crore a year earlier. Refunds rose nearly 10% to Rs.1.35 lakh crore, a surge that may signal stronger compliance or weaker advance payments from top taxpayers. Non-corporate tax, paid by individuals and smaller firms, the largest revenue source, fell to Rs.4.43 lakh crore from Rs.4.83 lakh crore. Corporate taxes rose to Rs.3.33 lakh crore from Rs.3.08 lakh crore. Securities transaction tax collections posted a modest gain, while receipts under "other taxes" dropped sharply to Rs.283 crore from Rs.1,636 crore. The government is targeting Rs.25.20 lakh crore in direct taxes for FY26. To meet its tax targets, the government will need strong double-digit growth in both corporate and personal income taxes to make up for sluggish advance tax receipts, hefty corporate tax refunds, and a delayed personal income tax filing deadline. While challenging, income tax collections are expected to pick up as the year advances and the base effects ease. "The tepid performance of advance tax collections seems to have been dampened by high refunds of corporation tax collections and a later deadline for personal income tax filings," said Aditi Nayar, chief economist, Icra Ltd. "The available data on advance tax collections suggests that the [government's] personal income tax and corporation tax collections are required to record a high double-digit growth in the remaining part of FY2026 to meet their respective FY2026 targets," Nayar added....