Direct tax to exceed target by Rs 6,000 crore

The finance ministry gave the first indication of the financial health of the nation at the end of 2003-04 yesterday. The revenue department has projected that direct tax collections would exceed the Budget target by Rs 6,000 crore.

Revenue Secretary Vineeta Rai said corporate tax collections would exceed the Budget target of Rs 51,499 crore by about Rs 10,000 crore, but the growth in income tax might be lower.

Accordingly, the total direct tax collections, as per the trends available till January 15, would be Rs 6,000 crore more than the Budget estimate of Rs 95,569 crore, she said.

Rai's comments were made at the inauguration of the nationwide Tax Information Network (TIN) made by Finance Minister Jaswant Singh yesterday. Singh said he was confident of meeting the fiscal deficit target in the vote-on-account, slated for February 3, 2004.

The minister also asked the direct tax department to reduce the cost of making a Permanent Account Number card from the present Rs 65, and add digital signatures to the card. This will enable assessees to file their tax returns electronically.

Rai said corporate tax payments had touched Rs 38,869 crore till January 15, which was 75 per cent of the Budget estimate for 2003-04. This was 33 per cent more than the same period in the last year.

Income tax has risen to Rs 27,892 crore, which is 63.3 per cent of the Budget estimate for 2003-04. The growth is 11.1 per cent compared with the last year.

Total indirect tax collections were Rs 99,380.86 crore in the April to December period. Excise collections were Rs 63,145.89 crore and customs accounted for the rest. Tax officials said both Customs duty and service tax should meet their Budget targets.

The first return on the TIN system was made on behalf of Infosys Technologies by its Chief Financial Officer T Mohandas Pai. He said because of dematerialisation, about 50 million assessees, including his company, could now file their TDS returns electronically.

Infosys would otherwise have had to prepare 20,000 certificates and a 150 kg load of papers.

The finance minister said it took the department only a year to set up the TIN, which had been recommended by the Kelkar task force on direct taxes. He said it is one more step in the ever decreasing interface of the citizens with the tax department.

TIN will allow the department to match the returns filed by the income tax assesees with those filed by the companies and track high value transactions. It will be hosted by the National Securities Depository Limited.

Speaking on the occasion, CB Bhave, managing director of NSDL, said the system can also be extended to the indirect tax department, as well as for the state level sales tax regime.