Net collections grew 32.5 per cent in the first six months of fiscal 2008-09.
Net direct tax collections grew 32.5 per cent in the first six months of fiscal 2008-09, slower than the 40 per cent growth in the same period last year, due to moderation in advance taxes paid by corporations and individuals.
Net direct tax collections (after refunds but before transfer of states’ share) stood at Rs 1,47,197 crore in July-September this year as compared with Rs 1,11,055 crore in the same period of 2007-08. This amounts to a year-on-year growth of 32.5 per cent.
| ON A DOWNWARD TREND Net direct tax collections in April-September. (Rs/crore) | |||
| April-Sept, 2007-08 | April-Sept, 2008-09 |
Growth (%) | |
** Figures in bracket gives growth rate in the April-September of 2007-08
Growth of corporation tax collections slowed to 35.65 per cent in the first six months of this fiscal as compared with 41 per cent in the same period last year. Similarly, growth of personal income tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections slowed to 27 per cent during the period, from 39 per cent in the same period last year.
“The moderation in direct tax collection growth in April-September is on account of lower growth in advance taxes paid by corporations and individuals,” said a revenue department official.
Advance tax collections grew by 11.5 per cent in the first half of this fiscal as compared with 30 per cent in the corresponding period last year. In fact, advance tax paid by individuals has declined by 11 per cent to Rs 8,000 crore in the second quarter of this fiscal as compared with Rs 9,000 crore in the corresponding period last fiscal. Advance tax paid by corporations has grown by 18.6 per cent to Rs 39,600 crore during the period as compared with Rs 33,400 crore in the same period last fiscal.
The volatility in stock markets has hit the securities transaction tax (STT) collections, which grew by only 2.7 per cent to Rs 3,182 crore during the first six months of this year.
Global financial turmoil and moderation in economic activity impacted advance tax payment by companies while individuals paid lower taxes as the basic exemption limit was raised by Rs 40,000 to Rs 1,50,000 in Budget 2008-09, another official said.
Based on estimates of income for the year, corporations pay 45 per cent and individuals 30 per cent of their annual tax liability by September 15 every year.
With advance tax collections moderating, the Income Tax Department is pinning hopes on tax deducted at source (TDS) to meet the annual target of Rs 3,95,000 crore. It is focusing on widening the TDS base and enforcing compliance. TDS is deducted while corporations and firms make payments towards salary, advertisements and contracts, among other things.
Corporate TDS collectionss grew by 52 per cent to Rs 30,810 crore in April-September this year as compared with Rs 20,210 crore in the same period last year.
Personal TDS collections was up by 28 per cent at Rs 33,276 crore during the period as against Rs 26,002 crore in the same period last year.
