Growth in direct tax collections decelerated in October, with the mop-up rising by 8.2 per cent to Rs 22,593 crore, as against Rs 20,882 crore during the corresponding period last year.
Officials in the tax department, however, said this was not a cause for concern as October and November have traditionally been low growth months. They also pointed out that growth during the first seven months of the financial year remained healthy and collections had crossed the Rs 2-lakh-crore mark.
According to the latest data released today, direct tax collections rose by 17.82 per cent during April-October to Rs 2,04,351 crore, as against Rs 1,73,447 crore collected during the corresponding period last year.
The growth was largely contributed by corporation tax collections which went up by 22.05 per cent to Rs 1,34,251 crore.
Personal income-tax collections, including securities transaction tax (STT), residual fringe benefit tax, and banking cash transaction tax, grew by 10.33 per cent to Rs 69,722 crore at the end of October.
| DIRECT GAINS Tax Collections (in Rs crore) | |||
| Type of tax | April-October 2009-10 | April-October 2010-11 | Growth (in %) |
| Corporation Tax | 1,09,996 | 1,34,251 | 22.05 |
| Personal Income Tax | 63,195 | 69,722 | 10.33 |
| Total | 1,73,447 | 2,04,351 | 17.82 |
| Source: Finance ministry | |||
STT collections, however, showed a decline of 6.8 per cent. The collections from STT were Rs 3,602 crore at October-end this year, against Rs 3,865 crore collected during the same period last year. Collections from wealth tax stood at Rs 378 crore in the first seven months of this financial year, compared with Rs 319 crore in the year-ago period, a growth rate of 18.5 per cent.
“This was much worse in the initial month and we expect it to improve, given that the markets are doing well,” said an official in the Central Board of Direct Taxes.
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The official also said that December onwards, the monthly increase would also be better since bulk of the tax collection during October and November was confined to tax deducted at source. Normally, tax collections are always below Rs 20,000 crore in a single month except four months — June, September, December and March — when the instalment for the quarter is due.
Direct tax mop-up in September had increased 26.12 per cent to Rs 81,647 crore, against Rs 64,737 crore in the corresponding month last year. This was the fastest growth in a month since the beginning of this financial year in April.
The growth was on account of the second instalment of tax paid by corporate taxpayers and the first instalment of advance income-tax paid by non-corporate taxpayers.
Direct tax collections for 2009-10 stood at Rs 3,78,000 crore, lower than the revised estimate of Rs 3,87,000 crore. The government has budgeted an overall tax mop-up of Rs 7,46,650 crore in the current financial year, with 57.59 per cent, or Rs 4,30,000 crore budgeted to come from corporation tax, personal income tax and wealth tax.