Tax authorities remain positive about meeting the projected direct tax collection of Rs 3.65 lakh crore. This compares to last year when collections were not in line with projections .
While the initial projection for the current financial year was Rs 3.65 lakh crore, finance minister Pranab Mukherjee, at a meeting of the chief commissioners in July last year, increased this to Rs 4 lakh crore.
The projection for corporate tax collection was also raised from an original target of Rs 2.44 lakh crore to Rs 2.78 lakh crore.
Central Board of Direct Taxes (CBDT) member C F Kahlon (Legal and Computers) told ET that it was possible to meet the revised targets since the economic scenario has been looking up over the last few months.
I-T officials in Mumbai said there were reasons to be optimistic. For example, the tax collection which had been showing a marginal growth of less than 3% in the first week of December 2009 increased sharply to over 8% by December 15, the last date for the third instalment of advance tax payment.
"If a single instalment can result in a year-on-year increase of over 8%, that is an indicator of things getting better," said a senior I-T official.
This is important since the collections for December, when the third of the four instalments in which advance taxes are paid, is generally considered a clear indicator of the total advance tax collection for the year. For instance, the shortfall for FY09 was apparent in the December quarter when there was a 11% dip in taxes collected.
As a result, the fiscal ended with a shortfall of nearly Rs 60,000 crore. This year, the momentum shown in December is expected to sustain till the end of the fiscal March 31, 2010.