Union Budget 2026: Direct and Indirect Tax Targets Raised to ₹44.04 Lakh Crore

Under Budget 2026, Finance Minister Nirmala Sitharaman proposed raising the government’s gross tax revenue target to ₹44.04 lakh crore for the fiscal year starting April 1, 2026. 

The increase relies on steady economic growth, improved compliance, and higher formalisation of income and businesses across the country.

Resilient Tax Collections

Tax collections have remained robust, supported by strong GST inflows and higher direct tax compliance, even as the government continues to rationalise rates and widen the tax base. The 2026-27 target reflects a 3.1% increase from last year, indicating cautious optimism amid slowing global growth.

Direct Tax Projections

Corporation tax collections are projected to climb to ₹12.31 lakh crore, up from ₹11.09 lakh crore in the current fiscal, reflecting expectations of stronger corporate profitability. 

Personal income tax collections are estimated at ₹14.66 lakh crore, compared with ₹13.12 lakh crore this year, highlighting the government’s reliance on a broadening tax base and higher formalisation of incomes.

Indirect Tax Estimates

Indirect taxes are also expected to see moderate growth. GST collections have been estimated at ₹10.19 lakh crore for 2026-27, slightly lower than the revised estimate of ₹10.46 lakh crore for 2025-26. 

Customs duty collections are projected at ₹2.71 lakh crore, while union excise duties are expected to rise to ₹3.89 lakh crore, supported by stable fuel demand and calibrated duty adjustments.

Also Read: Union Budget 2026: Securities Transaction Tax (STT) Raised on Futures and Options!

Conclusion

Budget 2026 demonstrates a careful approach to taxation, with higher targets for direct and indirect taxes aimed at strengthening government revenues, supporting public spending, and sustaining economic growth.

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