MM TAX CLUB

The Income Tax Department has released provisional data on Direct Tax Collections for FY 2025–26 up to 11 January 2026, revealing steady growth in net collections despite lower refunds. The figures highlight resilience in corporate and non-corporate tax revenues and reflect the broader strength of India’s formal economy.

Snapshot of Direct Tax Collections (₹ in Crore)

Key Highlights

1. Net Direct Tax Collection Grows by 8.82%

Net direct tax collections stood at ₹18.38 lakh crore, compared to ₹16.89 lakh crore in the same period last year. This robust growth has been primarily supported by:

• Strong corporate tax inflows
• Improved compliance
• Reduced refund outgo

2. Corporate Tax Continues to Lead

Corporate Tax (CT) collections increased from ₹7.67 lakh crore to ₹8.63 lakh crore, reflecting healthy corporate profitability and improved tax administration.

3. Non-Corporate Tax Shows Strong Momentum

Non-Corporate Tax (NCT), which includes taxes paid by individuals, HUFs, firms, LLPs, AOPs, BOIs, and local authorities, rose from ₹8.74 lakh crore to ₹9.30 lakh crore. This indicates:

• Growth in personal incomes
• Expansion of the tax base
• Better reporting and compliance

4. Securities Transaction Tax (STT) Stable

STT collections remained almost flat at around ₹44,867 crore, suggesting steady activity in capital markets without excessive volatility.

5. Significant Reduction in Refunds

Refunds declined sharply by 16.92%, falling to ₹3.12 lakh crore. Lower refunds have played a key role in boosting net collections and may indicate:

• More accurate advance tax payments
• Improved processing efficiency
• Better matching of returns and TDS data

What This Means for the Economy

The data underscores the structural strength of India’s tax ecosystem:

• Rising compliance through digitisation and analytics
• Broad-based contribution from corporates and individuals
• Improved fiscal position for the government

Higher net direct tax collections provide the government with greater fiscal space for capital expenditure, welfare schemes, and infrastructure investment, without excessive reliance on borrowing.

Outlook for FY 2025–26

With one quarter still remaining in the financial year, direct tax collections are expected to further improve, especially with:

• Advance tax payments in March
• Year-end corporate tax settlements
• Continued economic momentum

If current trends continue, FY 2025–26 could close with one of the strongest direct tax performances in recent years.

Source: Income Tax Department (TINMIS)

In a major blow to drug trafficking networks, officers of the Directorate of Revenue Intelligence (DRI) have seized 270 kilogram of Mephedrone, a synthetic narcotic drug, in a meticulously planned operation spanning multiple states on 11th-12th January, 2026. The contraband was being domestically transported concealed under chicken feed, used as cover cargo, a novel modus operandi adopted by the drug syndicate to evade scrutiny.

Acting on specific intelligence, DRI officers intercepted a truck in Rajasthan that was ostensibly transporting agro-based cargo. A detailed examination led to the recovery of 270 kg Mephedrone, having a value of Rs. 81 crore in the illicit market, ingeniously concealed within consignment of chicken feed. The driver of the vehicle and members of the syndicate involved in the transportation and persons escorting the said consignment were apprehended on the spot.

Follow-up searches conducted at multiple locations in Haryana resulted in the apprehension of other key members of the syndicate, who were involved in the manufacture and supply of the seized contraband. Some raw material was also found in a dismantled clandestine drugs manufacturing facility.

The operation was logistically challenging, involving sustained efforts, inter-state coordination, and precise execution to intercept the movement of the contraband. The seizure of contraband and arrest of six key syndicate members has led to the unravelling of a well-organised, multi-jurisdictional narcotics syndicate, operating across several States.

In the current financial year, 2025-2026, DRI has already busted six clandestine factories, which were illicitly manufacturing Mephedrone, Alprazolam and Methamphetamine.

· Mephedrone – Latur in April 2025; Bhopal in August 2025; Wardha in December 2025

· Alprazolam – Vapi in November 2025, and Hyderabad in October 2025

· Methamphetamine – Greater Noida in October 2025.

The Directorate of Revenue Intelligence reiterates its consistent and unwavering commitment to the fight against drug manufacturing, trafficking and realising the goal of ‘Nasha Mukt Bharat Abhiyan’. Drugs pose a serious threat to public health, national security, and the socio-economic fabric of the country. As the apex anti-smuggling agency, DRI has been leveraging intelligence-driven enforcement and coordinated action across the country to curb the menace of narcotic drugs and psychotropic substances.

In a significant step towards building long-term financial security from an early age, the Pension Fund Regulatory and Development Authority (PFRDA) has issued the NPS Vatsalya Scheme Guidelines, 2025. The guidelines provide a clear framework for eligibility, contributions, withdrawals, and transition provisions under the National Pension System Vatsalya (NPS Vatsalya)—a pension-oriented savings scheme designed exclusively for minors.

What is NPS Vatsalya?

NPS Vatsalya was announced in the Union Budget 2024–25 and officially launched on 18 September 2024 by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman.
The scheme allows parents and legal guardians to start structured pension savings for their children at a very young age, ensuring continuity of savings even after the child attains adulthood.

Purpose of the Scheme

The core idea behind NPS Vatsalya is to:

• Encourage early financial planning

• Build a long-term pension corpus for children

• Promote financial literacy from childhood

• Ensure a smooth transition to regular NPS on attaining majority

Key Features of NPS Vatsalya

1. Eligibility

• Open to all Indian citizens, including NRI and OCI minors

• Child must be below 18 years of age

• The minor is the sole beneficiary

• Account is opened in the name of the minor and operated by a parent or legal guardian

2. Contribution Rules

• Minimum initial and annual contribution: ₹250

• No maximum limit on contributions

• Contributions can also be gifted by relatives and friends, making it ideal for birthdays or special occasions

3. Pension Fund Choice

• The guardian can choose any one Pension Fund registered with PFRDA

4. Partial Withdrawal Facility

• Allowed after 3 years from account opening

• Up to 25% of own contributions (returns excluded)

• Permitted for:

  • Education

  • Medical treatment

  • Specified disabilities

• Withdrawal limits:

  • Twice before 18 years

  • Twice between 18 and 21 years, subject to conditions

5. On Attaining Majority (18 Years)

• Fresh KYC is mandatory

• Options available until the age of 21:

  • Continue under NPS Vatsalya, or

  • Shift to NPS Tier I (All Citizen Model or other applicable models), or

  • Exit the scheme with:

    • Up to 80% as lump sum

    • Minimum 20% compulsory annuitisation

• Full withdrawal allowed if total corpus is ₹8 lakh or less

Special Incentives for Grassroots Workers

The guidelines also introduce a targeted incentive framework for community-level workers such as:

• Anganwadi workers

• ASHA workers

• Bank Sakhis

This move recognises their critical role in spreading awareness and facilitating enrolment, particularly in rural and semi-urban areas.

Why NPS Vatsalya Matters

NPS Vatsalya aims to:

• Instill a habit of disciplined savings

• Strengthen long-term financial planning

• Support the national vision of Viksit Bharat @2047

• Move towards a pensioned and financially secure society

The newly issued guidelines bring much-needed clarity, transparency, and uniformity, making it easier for parents, guardians, and stakeholders to adopt the scheme with confidence.

???? For detailed provisions and operational aspects, stakeholders are advised to refer to the official NPS Vatsalya Scheme Guidelines, 2025.

In a major step towards the national mission of “Nasha Mukt Bharat”, the Central Bureau of Narcotics (CBN), Madhya Pradesh Unit, has successfully busted a clandestine MD (psychotropic substance) manufacturing unit and seized a record 31.250 kilograms of MD powder. This operation marks one of the most significant drug enforcement actions in the region.

Intelligence-Led Operation

Acting on specific and credible intelligence, a coordinated team of CBN officers carried out a carefully planned raid at Teerth Nursery and Farms, located in Village Amla Agar. The site—a double-storeyed farmhouse hidden nearly 3.5 kilometres away from the main road—was clearly chosen to avoid detection and facilitate illegal activities.

During the operation, three individuals were detained from the farmhouse, which was situated in a secluded area. Their suspicious conduct prompted a detailed search of the premises.

Huge Seizure and Lab Exposure

The search led to the recovery of 31.250 kg of MD powder, concealed inside a bag within the house. On sustained interrogation, the detained individuals admitted that the psychotropic substance had been manufactured by them illegally.

Further disclosures revealed the existence of a fully functional illicit drug manufacturing laboratory operating within one of the rooms on the nursery premises. Acting swiftly, officers recovered utensils, halogen bulbs, and specialised machinery used in the synthesis of MD powder.

In addition, a Mahindra Bolero Pickup, parked near the entrance of the property, was searched. Officers recovered nearly 600 kilograms of various chemicals used in the production of MD powder. The vehicle, suspected to be used for trafficking, was also seized.

All items were confiscated under the relevant provisions of the NDPS Act, 1985.

Alarming Revelations During Interrogation

Interrogation revealed that two of the accused were directly involved in large-scale MD manufacturing. Shockingly, they disclosed that they had sufficient chemicals—except one essential precursor—to manufacture an additional 250 to 300 kilograms of MD powder, highlighting the serious threat this illegal operation posed to public health and safety.

Arrests and Ongoing Investigation

All three accused have been arrested under the NDPS Act, and further investigation is currently underway. Authorities are working to trace and dismantle the entire drug manufacturing and trafficking network, ensuring that every link—from production to distribution—is exposed.

CBN’s Commitment to a Drug-Free India

The Central Bureau of Narcotics has reiterated its unwavering commitment to combating drug trafficking and illicit drug manufacturing. Through relentless enforcement and intelligence-driven operations, the CBN continues to play a crucial role in safeguarding society and advancing the vision of a drug-free India.

The Department of Financial Services (DFS) continues to closely monitor the health and direction of India’s public sector insurance ecosystem. In this context, a high-level review meeting was chaired by the Secretary, DFS, Shri M. Nagaraju, on 13 January 2026, focusing on the financial and business performance of Public Sector Insurance Companies (PSICs).

The review covered FY 2024–25 and the first half of FY 2025–26, with a strong emphasis on profitability, digital transformation, and customer-centric reforms.

Key Insurance Companies Reviewed

The meeting brought together leadership from all major public sector insurers, including:

• Life Insurance Corporation of India (LIC)

• General Insurance Corporation of India (GIC)

• New India Assurance Co. Ltd. (NIACL)

• National Insurance Co. Ltd. (NICL)

• United India Insurance Co. Ltd. (UIICL)

• Oriental Insurance Co. Ltd. (OICL)

• Agriculture Insurance Company of India Ltd. (AICIL)

Focus on Profitable Growth and Risk Management

During the review, the DFS Secretary emphasised the need for PSICs to increase profitable business while maintaining their market share. He urged insurers to adopt focused strategies to reduce loss ratios, particularly in high-risk portfolios, and to continuously strengthen their retail insurance segments.

Another key direction was the development of new and customised insurance products, especially to cater to the younger generation and to address emerging risks in a rapidly changing economic and technological environment.

Digitalisation and Customer-Centric Reforms

A major highlight of the discussion was the push towards complete digitalisation. The Secretary stressed the importance of leveraging technology to achieve 100% digital onboarding for retail insurance products, ensuring faster, smoother, and more transparent customer experiences.

He also highlighted the role of communication and outreach, encouraging PSICs to improve brand visibility through digital platforms and social media to better connect with today’s customers.

Recognition of Key Achievements

The Secretary appreciated the efforts of LIC, particularly its steady progress towards improved profitability and the successful expansion of the Bima Sakhi initiative, which has played a vital role in strengthening insurance penetration in rural and semi-urban areas.

AICIL was also commended for achieving a significant milestone by crossing ₹10,000 crore in premium collection during the year.

Priority on Grievance Redressal and Claims Settlement

Reinforcing the importance of trust in insurance, the Secretary clearly stated that timely resolution of public grievances and seamless, prompt claims processing must remain a top priority. Efficient claims settlement, he noted, is central to delivering quality service and enhancing customer confidence in public sector insurers.

Participants at the Meeting

The meeting was attended by senior leadership from across the sector, including:

• Mr. R. Doraiswamy, CEO & MD, LIC

• Ms. Girija Subramanian, CMD, NIACL

• Ms. Rajeshwari Singh Muni, CMD, NICL

• Mr. B. S. Rahul, CMD, UIICL

• Mr. Sanjay Joshi, CMD, OICL

• Dr. Lavanya R. Mundayur, CMD, AICIL

• Mr. Hitesh Joshi, ED, GIC

Closing Thoughts

The review reflects the government’s continued focus on making public sector insurance companies financially strong, digitally advanced, and customer-first. With sustained emphasis on innovation, technology, and service quality, PSICs are expected to play a crucial role in expanding insurance coverage and strengthening financial security across India.