Direct tax may fall short Rs 2,000 cr

Direct tax collection is likely to be Rs 2,000 crore short of the revised estimate for 2004-05 despite a higher residual collection expected by the end of the first week of April.

According to data available with the finance ministry, the best-case scenario after accounting for residual figures is likely to be around Rs 1,31,000 crore against a revised Budget estimate of Rs 1,33,929 crore.

Ministry officials told Business Standard that income and corporation tax collection figures till March 31, 2005, were estimated at Rs 1,26,900 crore.

Officials pointed out that the residual figures till the first week of April, 2005, are expected to be higher at around Rs 3,900 crore keeping a 25 per cent growth assumption, compared with Rs 3,266 crore in the corresponding period the previous year.

When the residual figure is added to the total direct tax collected till March 31, the total amount is likely to be Rs 1,31,000 crore, officials added.

The government had initially set a target of Rs 1,39,365 crore collection from direct tax for 2004-05, which was later revised upwards by about Rs 5,000 crore, to be once again revised downwards to Rs 1,33,929 crore in the Budget.

Finance Minister P Chidambaram will review direct tax collections during his meeting with chief commissioners on Tuesday.

Finance Minister P Chidambaram has also asked chief commissioners of Customs and excise to set up help desks as part of efforts to increase tax compliance.

"The finance minister asked the chief commissioners to set up help desks with the assistance of industry chambers in each field formation," a finance ministry official told Business Standard.