Riding on higher tax deducted at source (TDS) receipts, net direct tax collections rose by 38.31 per cent to Rs 84,409 crore in the first five months of fiscal 2008-09, as compared with Rs 61,030 crore in the corresponding period last fiscal.
This is a slight moderation compared with the over 42 per cent growth in net direct tax collection seen in the same period of the previous fiscal. Net direct collection refers to tax collections after refunds, but before transfer of states’ share in central revenues.
“There is a slight moderation, but direct tax collections are still bullish. Whether tax collections are on track or not will be known after second quarter advance tax payments come in September,” said an income-tax official.
Overall growth in TDS was more than 40 per cent, but growth in corporate TDS was even higher. Corporate TDS collections rose by over 55 per cent to Rs 26,445 crore in the April-August period this year against Rs 17,037 crore during the year-ago period.
The higher TDS compliance is attributed to several verifications and surveys carried out by the Income Tax Department, which resulted in detection of hundreds of crore of rupees not deducted or not paid to the government account after deduction.
Corporation tax collections were up 43.49 per cent to Rs 48,450 crore during the period as against Rs 33,766 crore in the same period last year.
| STRONG COFFERS Net direct tax collection in April-August (in Rs cr) | |||
| Head | April-August 2007 | April-August 2008 | Growth (%) |
| Net collection | 61,030 | 84,409 | 38.31 |
| Corporate tax | 33,766 | 48,450 | 43.49 |
| Personal tax | 27,195 | 35,840 | 31.79 |
| FBT | 1,015 | 1,339 | 31.85 |
| STT | 2,372 | 2,730 | 15.10 |
| BCTT | 348 | 274 | -21.36 |
Personal income-tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections grew at 31.79 per cent to Rs 35,840 crore in the period as against Rs 27,195 crore a year ago.
Among regions, tax growth in Delhi and Mumbai was 76.23 per cent and 32.49 per cent, respectively. Other regions with high tax growth are Nagpur (88.75 per cent); Kochi (58.07 per cent); Kolkata (56.82 per cent); Bhubaneshwar (53.59 per cent) and Bangalore (48.87 per cent).
The cost of direct tax collection, on the other hand, which had declined to an all-time low of 0.54 per cent during fiscal 2007-08, is likely to further decline to about 0.43 per cent during the current fiscal, the lowest among all large economies in the world, the Income Tax Department said.
Robust growth of over 35 per cent in direct taxes during the past few years has helped the central government in meeting fiscal targets, fund developmental programmes and give higher pay and allowances to its employees.
