Stiff collection target prods CBDT to try its luck with Chidambaram
The revenue department may defer tax refunds amounting to Rs 20,000 crore until April 2007. According to sources in the Central Board of Direct Taxes, the proposal to defer it to the next fiscal will be discussed with finance minister P Chidambaram in early February. They, however, said the minister had in the past been always keen that refunds were made on time.
The CBDT sources said, Chidmabaram had recently raised the internal direct tax collection target for the current fiscal by 12% to Rs 2,30,000 crore against the Budget estimate of Rs 2,10,000 crore. The board was confident of reaching the revised target. At the same time, it felt that refunds in the last quarter of the fiscal might just spoil its chances of fully achieving the target.
Gross direct tax collection until January 22 stood at Rs 1,82,880 crore, with corporate tax collection growing 43.2% to Rs 1,18,183 crore and personal income tax collection shooting to Rs 56,288 crore, an increase of 27.3% over the same period last fiscal.
The department has already issued refunds amounting Rs 27,438 crore until now. However, over Rs 20,000 crore in refunds are still pending.
If a refund is delayed by over three months, the assessee can claim 0.5% interest a month on the amount, according to Section 244A of the I-T Act.