Direct tax collection increases 8.1% to Rs 2.27 lakh crore
December, 18th 2009
The recovery of the Indian economy, as was broadly expected, has worked well for the advance tax figures for the third installment that was payable by December 15. The all India direct tax collection, which includes corporate and personal taxes, increased 8.1% to Rs 2.27 lakh crore, according to figures that are currently with the income-tax (I-T) department.
This relates to collections between April and December this year and compares to the same period for the the previous year.
Advance taxes are usually paid in four installmentson June 15, September 15, December 15 and March 15. With only one installment remaining to be paid, officials are now hoping that a stronger economy can boost the advance tax collection by the end of the fiscal.
According to senior I-T officials, the rise in the tax collection could go up to 10 % by the third week of December. This is when the tax mopup operation for the third quarter is expected to be completed. An 8% increase in tax mopup is considered significant in view of the fact that the growth in tax collection this fiscal has been limping at a rate of 2-3%.
This was until the collection process began for the third installment of the advance tax collection. The marked jump in the rate of increase was attributed to healthier GDP figures recorded for the second quarter apart from companies reporting better financial numbers.
Corporate tax collection has gone up by 11.3% to 1.48 lakh crore. This is on the back of zero-tax payable by the state-owned oil companies like IOC, HPCL and BPCL. This is on account of the non-issue of oil bonds by the government. PSU oil companies generally account for about Rs 2,500 crore.
The tax collection from foreign banks operating in India has also come down significantly, affecting the rate of growth in tax collection.
The big relief for taxmen came when the domestic banking industry, which includes the largest public sector bank State Bank of India, reporting higher tax payments.
Other large companies such as Reliance Industries, Hindustan Unilever, Tata Steel too have paid higher advance tax this quarter. Overall, companies in the auto industry and pharmaceuticals have paid higher advance tax. What could be a dampener is the possible impact of the drought in many parts of the country, which could impact the figures for the March 15 advance tax collection.
The governments projection for the years tax collection is Rs 4 lakh crore. This is a tall order that can be met only if the recovery process gains pace in the remaining period of the fiscal, said a senior I-T official.