CBDT ups direct tax mop-up target by 12%

Buoyed by robust collections over the last three quarters, the Central Board of Direct Taxes (CDBT) has raised its annual target for direct tax collections by 12 per cent for 2006-07.

The CBDT now proposes to mop up around Rs 2,30,000 crore, against the 2006-07 budget estimate of Rs 2,05,000 crore.

While targets have been enhanced for all centres, the highest increase has been set for Mumbai, which is the biggest contributor to the direct tax kitty.

Mumbai's collection target has been increased by Rs 10,000 crore to Rs 79,000 crore.

This enhancement is based on the assumption that collections will be up by 40 per cent over last fiscal.

Though the traditional mainstays, the oil companies, have not contributed significantly to boosting the tax collections this year, the banking and manufacturing sector have done very well.

This is in contrast to the previous year, when the poor performance of banks, insurance oil and telecom companies had contributed to a shortfall in direct tax collections.

While rising crude prices took a toll of the oil marketing companies, signs of increasing interest rates had affected banks' treasury books.

However, in 2006-07, credit pick-up and rising interest rates have boosted the balance sheets of banks.