NEW DELHI: Gross direct tax collections rose less than 5% to Rs 5,45,207 crore during the fiscal year up to June 19. The first of the four instalments of advance tax receipts increased at a muted 3.9%, raising fears of a sharp slowdown in the growth in corporate profits during the June quarter.On a net basis, direct tax collections were 1.4% lower at a little under Rs 4.6 lakh crore, but that was on account of a 58% jump in refunds, which added up to Rs 58,385 crore. The spike in refunds comes amidst finance minister Nirmala Sitharaman’s clear missive to ensure that officials don’t sit on refunds, a message she delivered to the indirect tax brass on Friday and which is likely to be reiterated to top income tax officials in the coming week.Typically, advance tax payments are seen as a barometer of corporate health with some individuals also required to pay. The changes in personal tax may have played a part too. “The revised tax slabs and reduced personal tax rates that came into effect from April 1, 2025, have provided relief to salaried individuals, and this is naturally reflected in lower TDS collections. On the corporate front, we’re seeing the impact of increased capital expenditure by businesses. As companies invest in expansion and infrastructure, they benefit from higher depreciation claims, which temporarily lower taxable profits. This is a healthy sign of forward-looking investment behaviour,” said Samir Kanabar, tax partner at consulting firm EY India.In recent months, industrial output has seen a slowdown although GST numbers have been steady.“Tax collections for recent quarter, while subdued, put spotlight on emerging macro trends posing challenges to earning growth for corporates andd non-corporates taxpayers for the financial year. Also, as many elements of current geopolitical scenario play out over next few months, impact of the developments would come to bear on the forecast for rest of year too,” said Sumit Singhania, a partner at Deloitte India.