Corporation tax highest in decade

INTERIM BUDGET & THE GOVERNMENT/DIRECT TAXES

Fiscal 2004-05 will end with the highest ever growth rate of Corporate tax in over a decade at 26.4 per cent.

The hefty rise in corporate tax to Rs 62,986 crore, along with a largest ever disinvestment receipts, has helped finance minister Jaswant Singh to clip the fiscal deficit target to 4.8 per cent of the GDP for this fiscal.

Commenting on the trends, Central Board of Direct Taxes chairman, PL Singh said he was confident that with the last instalment of advance tax yet to come in they will surpass the revised estimate also.

The interim budget has therefore been able to revise upward the estimate of direct tax collection for the current fiscal by 8.04 per cent to Rs 1,03,255 crore.

For the next fiscal, the ministry has assumed the same robust growth rate assume a rise of Rs 22,600 crore of the direct tax kitty to Rs 1,25,855 crore.

The corporate tax collection is expected at Rs 79,546 crore. The confidence of corporate India has more than compensated for the Rs 3,801 crore shortfall that is likely to occur in income tax collections for the current fiscal.

The Centre has had to revise income tax collection target for 2003-04 by 8.6 per cent, which has now been pegged at Rs 40,269 crore.

It has, however, budgeted a 15 per cent surge in collections under this head for the next fiscal and hopes to rake in Rs 46,309 crore.

Next year's accruals have been budgeted as ordinary collections (Rs 29,432 crore), advance tax collections (Rs 47,489 crore), surcharge (Rs 2,148 crore) and miscellaneous receipts (Rs 477 crore).

The accruals under the four heads for income tax for 2004-05 have been pegged at Rs 20,839 crore through ordinary collections, Rs 21,765 crore through advance tax collections, Rs 1,390 crore through surcharge and Rs 2,315 crore through miscellaneous receipts.