Direct tax mop-up gives hope to govt to meet Budget
October, 12th 2009
With direct tax collections crossing 1.50 lakh crore mark in the first half of the fiscal, the government is hopeful of meeting the Budgeted tax target of around Rs 3.70 lakh crore and even achieving the revised goal of collecting Rs 4 lakh crore.
"The experiences for earlier years show that 40 per cent of the collections are made in the first two quarters, while the 60 per cent in the second two quarters that makes us hopeful of meeting the Budget target of Rs 3.70 lakh crore and even surpassing it," official sources said.
The government has collected Rs 1.54 lakh crore from direct taxes, primarily personal income tax and corporate tax, in the first two quarters this fiscal.
If that (Rs 1.54 lakh crore) accounts for 40 per cent of the total collections at the end of year, the government would collect nearly Rs 2.25 lakh crore in the next half of this fiscal, taking the total to Rs 3.79 lakh crore.
As such, if that trend prevails, the Budget estimates would be surpassed, sources said.
Finance Minister Pranab Mukherjee recently revised the tax target upwards by Rs 30,000 crore to Rs 4 lakh crore.
Sources said if turnaround in taxes are any indication, the revised target could also be met.
Advance tax collections grew in the second quarter ended September 15, 2009, after declining in the previous three quarters.
Reflecting clear signs of economic revival in industry, advance tax collections grew by 6.21 per cent to Rs 50,542 crore in the second quarter.
The growth had turned negative by a whopping 22.80 per cent in the third quarter of last fiscal after the impact of global downturn that slowed down Indian economy.
The collection growth again turned negative by 12.57 per cent in the fourth quarter of last fiscal and 6.17 per cent in the first quarter of this fiscal.
Advance tax collections for the second quarter of this fiscal showed that consumer durables, led by automobiles, have shown a strong recovery as also the software sector, cement and PSU banks.
However, the realty sector continues to be badly hit. Metals led by steel remained down.