Direct tax mop-up grows 27.5%

Direct tax collections appear to be picking up, with the figures for April-October registering a 27.5 per cent growth against the budgetary target of 34 per cent.

However, the slow growth in excise collections has prompted the finance ministry to revise its internal target for service tax to Rs 22,000 crore from Rs 17,500 crore estimated in the Budget.

Personal income tax has for the first time this fiscal registered a double-digit growth rate of over 15 per cent during April-October, standing at Rs 24,900 crore compared to Rs 21,500 crore during April-October 2004-05.

The increase has been attributed to the huge growth in collections during October. As per data available with the finance ministry, the collections during October were Rs 5,600 crore, nearly double the collection of Rs 2,700 crore in October 2004.

However, excise collections registered a growth of only 7.5 per cent, to Rs 56,711 crore against Rs 52,728 crore during April-October 2004-05. Service tax proceeds increased to Rs 10,194 crore during April-October compared to Rs 6,138 crore last year, an increase of 66 per cent, while customs tax proceeds increased to Rs 37,164 crore compared to Rs 30,746 crore in April-October 2004-05, an increase of 21 per cent.

The internal customs collection target has already been revised by Rs 7,000 crore to Rs 60,000 crore for 2005-06.

Officials said the increase in personal income tax collections in October took place despite the lower returns this year compared to 2004. Last year, the government had extended the last date for filing income tax returns for all categories to October 31.

"One reason for the increase could be the impact of the advertisement campaign carried out by the ministry. The increase could also be on account of higher taxes paid by non-corporate business entities," an official said.

Corporation tax continues to do well with collections during April-October standing at Rs 38,000 crore compared to Rs 30,000 crore in the corresponding period last year, a growth of nearly 27 per cent.

In addition to this, collections from fringe benefit tax were Rs 1,700 crore, Rs 1,300 crore from securities transaction tax and Rs 100 crore from the banking cash transaction tax.

Direct tax collection increased by 31 per cent in Delhi, 36 per cent in Kolkata, 30 per cent in Chennai, 33 per cent in Hyderabad, 27 per cent in Pune and 84 per cent in Nagpur.