With advance tax payments growing at their fastest pace in five years, the government today said direct tax collections went up by 15.49 per cent to Rs 68,675 crore, mainly due to a spurt in corporation tax mop-up.
Direct tax collections during April-June of 2009-10 were estimated at Rs 59,465 crore, 3.5 per cent higher than the year-ago level, as the economy was facing the ripple effects of the global economic slowdown.
But with economic activity picking up, tax collections were expected to be robust in the coming quarters as well, said a government official. The economy grew at 8.6 per cent during January-March and the index of industrial production has been rising at double-digit rates. Besides, corporate performance is expected to be strong this quarter.
| DIRECT GAINS (Collections in Rs crore) | |||
| Apr-June | 2009-10 | 2010-11 | % change |
| Corporationtax | 35,709 | 43,439 | 21.65 |
| Personal income tax | 23,870 | 24,075 | 1.24 |
| Total | 59,465 | 68,675 | 15.49 |
And, the signs are already visible with corporation tax collections in the first quarter estimated to have grown by 21.65 per cent to Rs 43,439 crore, against Rs 35,709 crore in the same period last year, according to a finance ministry press release.
On the other hand, personal income tax, including securities transaction tax, residual fringe benefit tax and banking cash transaction tax, grew by 1.24 per cent to Rs 24,075 crore, compared with Rs 23,780 crore in the corresponding period last year. The growth was meagre as collections from securities transaction tax fell 25.21 per cent to Rs 1,094 crore, against Rs 1,462 crore in April-June last year.
Corporate advance tax for the first quarter stood at Rs 26,876 crore, against Rs 20,456 crore in the year-ago period, a rise of 31.4 per cent, the fastest since 2005. The corresponding growth in corporate advance tax stood at 3.4 per cent and 25.1 per cent in 2008-09 and 2007-08, respectively. The increase in advance tax collection was 30 per cent in 2006-07 and 26.9 percent in 2005-06.
The government hopes to collect Rs 4,30,000 crore through direct taxes during this financial year. The direct tax collections for 2009-10 stood at Rs 3,78,000 crore. This was lower than the revised estimate of Rs 3,87,000 crore. Finance minister Pranab Mukherjee has asked the revenue department to aim for a higher direct tax collection target this year.