Its definitely a merry Christmas for Finance Minister P Chidambaram. The governments advance tax collections grew by 38.5% in April-December 18, 2006.
Total direct tax collections grew 42.5% against the Budget growth target of 27.5%. With such buoyancy, the government may well be on its way to overshoot the budget target.
Led by the oil companies who came out of red due to the dip in global crude prices and the government-issued bonds, India Inc has been on a roll with manufacturing and services contributing to the tax kitty. The corporate advance tax collections were Rs 59,393 crore in April-December 18, 2006, up 38.5% over last years collection of Rs 42,881 crore.
In fact, the corporate advance tax collections in December 2006 (up to December 18) grew 46.4%, indicating a continued robust performance by India Inc. Advance tax is paid in 4 instalments, 15% by June 15, 30% by September 15 and 30% by December 15 and 25% by March.
So on the corporate front, the government gets 75% of the tax till December. These numbers set the course for changes in tax rates and other measures in the Budget. The net direct tax collections till December 18 were Rs 1,33,461 crore, up 42.5% over last year. The budgetary estimate for direct taxes is Rs 2,10,419 crore for 2005-06.
Corporate taxes rose 51.2% at Rs 83,614 crore in the period under review. Personal income tax, including fringe benefit tax, rose 26.6%.