Senior income-tax (I-T) officials expect tax collections to increase substantially by December 15, when the third installment of advance tax payable in the current fiscal is due.
But officials, who spoke on condition of anonymity, are not ready to extend their predictions beyond December, largely because of the experience last fiscal, when collections crashed in the December 2008 to March 2009 period.
Data for all India direct tax collections till Friday last showed a year-on-year increase of 3%, which according to tax professionals, is a continuing sign of the recovery process that began a couple of months ago. The figure for April 1-October 9 period is Rs 152,000 crore.
The government is seeking to generate Rs 400,000 crore this fiscal by way of direct tax collection. This is almost the same figure projected for the last fiscal. The fact that the tax collection during the April-October period is comparable to the same period last fiscal is an encouraging sign, an I-T source said.
The steep decline in the collection last fiscal began after September, as an inevitable fall out of the global financial meltdown that followed the collapse of US bank Lehman Brothers. Ultimately, Indias fiscal year ended with a Rs 60,000 shortfall, compared to the original target, in direct tax collection.
Advance taxes in India are paid in four installments: June, September, December and March. Under normal circumstances, the trend in September continues till the end of the fiscal provided nothing unusual happens in the rest of the year.
Direct tax collected from Mumbai, which accounts for over 35% of the all India collection, is about 6% higher over the year-ago figure at Rs 63,200 crore. The collection by way of tax deduction at source from Mumbai too is on the rise, about 10% up to Rs 24,700 crore, compared to the yoy figure.
Revenue from Chennai, Hyderabad, Kolkata, Chandigarh, Meerut, Bhubaneswar, Jaipur, Kochi, Lucknow and Kanpur showed a significant growth over the year ago figures.
The collection so far includes revenues from advance taxes, self assessment taxes, securities transaction taxes and regular assessments.