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Graphic of the day: Tax revenue dip

Net tax receipts, at just 28.6 percent of budget estimates, are lagging sharply behind last year's pace, becoming the key driver in the widening fiscal deficit

By Samreen Wani
Last Updated: Oct 01, 2025, 13:56 IST1 min
Net tax revenue receipts as a share of budget estimates slowed sharply to just 28.6 percent in April-August FY26 (down from 33.8 percent last year), a drop partly attributed to the income tax cuts announced in the last Budget for those earning up to Rs 12 lakh a year. In fact, the percentage of Budget estimates met by tax receipts in FY26 is the lowest ratio recorded since FY22. This revenue shortfall is directly feeding the widening fiscal deficit, which hit 38 percent in the first five months of this financial year.
Net tax revenue receipts as a share of budget estimates slowed sharply to just 28.6 percent in April-August FY26 (down from 33.8 percent last year), a drop partly attributed to the income tax cuts announced in the last Budget for those earning up to Rs 12 lakh a year. In fact, the percentage of Budget estimates met by tax receipts in FY26 is the lowest ratio recorded since FY22. This revenue shortfall is directly feeding the widening fiscal deficit, which hit 38 percent in the first five months of this financial year.

First Published: Oct 01, 2025, 13:56

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