Tax collections under the Voluntary Disclosure of Income Scheme (VDIS), 1997, are expected to top what the revenue department describes as the reasonable level of Rs 2,500-Rs 3,000 crore. The total number of declarants has crossed 100,000.
Revenue secretary N K Singh yesterday scoffed at media speculation about the likely collection target under the scheme and described it as exaggerated.
I am happy with the response so far in terms of the geographical distribution of declarants all over the country. And one additional feature of this declaration scheme has been that there is no stigma attached to the declarant. We have ushered in a new milieu in tax administration, said the revenue secretary.
The revenue secretary is expected to publicly disclose the collection figures early next week. Sources disclosed that while there was no official target, the revenue department internally said the budget for the ad campaign should be pegged at one per cent of the expected tax collection.
This was to allow the department to visualise the kind of campaign it desired, explained officials. The ad budget for the VDIS scheme was around Rs 30 crore.
By that estimate, the minimum expected tax collection would be around Rs 3,000 crore. Now, the government believes these expectations will be realised. Under the scheme, the finance minister had proposed that 75 per cent of the tax collection would be transferred to the states. In other words, if the scheme nets Rs 3,000 crore, the Centres share will be around Rs 700-800 crore.
This could reduce the shortfall in direct tax collections. The revenue department believes that though tax collections have not matched expectations so far, the second half of the year will be better for the taxman.
