Direct tax collections are likely to be over Rs 10,000 crore of the Budget target of Rs 2,10,419 crore. This will be the first time in many years that there is no shortfall in tax collections. However, it is still less than the finance ministrys earlier estimate of a Rs 20,000 crore surplus in tax revenue.
A finance ministry official said, Tax collection has been growing at a rate of 40% compared with last years and it is over 28% of this fiscals estimate. We are confident of overshooting the budget target.
Direct tax collections may be boosted further in December when a large chunk of advance tax is paid to the government. Last fiscal, about Rs 25,000 crore was paid as advance tax.
Gross direct tax collections crossed the Rs 1 lakh crore mark in mid-November, amounting to Rs 1,21,118. 7 crore. Corporate tax collections grew by 36.5% to Rs 75,494 crore in April-November, 2006. Personal income tax collections registered a growth of 25.9% to Rs 39,786.3 crore. The biggest gainer has been the securities transaction tax collections, which were up by a whopping 91.2% to Rs 2907.5 crore in the first eight months of the fiscal. Fringe benefit tax collection has seen a growth of 39% to Rs 2,440.7 crore in the period under review.
While a buoyant economy and good corporate earnings, along with stricter measures to curb tax evasion are among the main reasons for such record tax collections, sources however said, this record was also due to certain accounting changes.During the State Bank of India strike in March, the government was unable to deposit the tax collected there into the Reserve Bank of India.
A part of the funds were later deposited during the new financial year of 2006-07, allowing the government to start the fiscal with a surplus in its kitty. The surplus is estimated to be about Rs 3,000 crore, sources said.