Net direct tax collections declined by 36 per cent in November this year mainly on account of the economic slowdown and also due to advancement of the last date for filing tax returns for companies and firms.
Direct tax receipts in the month under consideration stood at Rs 10,346 crore as against Rs 16,189 crore in the corresponding month last year. It grew at 62 per cent in November 2007. Net direct tax collections is computed after giving refunds but before devolution of state’s share.
Already, excise and Customs duty collections reported a decline of 5 per cent in October 2008, an indicator of factory output slowing down. Indirect tax collection numbers for November will be released later.
Another factor that has contributed to the decline in the November collection is advancement of the due date of filing of returns by companies and firms to September 30 from October 31. As a result, self assessment tax, which used to spill over to November, has been realised in October this year, the official added.
Corporate taxes, which form a major portion of the direct tax kitty, dipped by nearly 41 per cent to Rs 4,561 crore in November as compared to Rs 7,741 crore in the same period in 2007. Similarly, Personal Income Tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections declined by 31 per cent to Rs 5,782 crore as compared to Rs 8,414 crore in the year ago month.
Securities transaction tax, which is levied on the value of securities bought and sold, has seen a sharp decline due to reduced capitalisation in the Indian stock market.
“The budget estimate of Rs 3,65,000 crore for 2008-09 may be achieved. However, it seems difficult to achieve the department’s internal target of Rs 3,95,000 crore this year,” said a senior Income Tax official.
