Slowdown helps to decline Income-tax collections in February
March, 07th 2009
India is likely to miss its direct tax collection targets for the fiscal under the impact of slowing economic activities and lower profit margins for Indian companies.
Salary cuts and retrenchments during the previous months caused lower revenue in February for the state exchequer. The department of income tax collected Rs 5,920 crore as personal income taxes in February as compared to Rs 8,762 crore during the same month last year.
However, the corporate tax collection stood at Rs 5,578 crore against Rs 5,390 crore in the same period last year. The government collected Rs 2,58,902 crore as direct tax during April-February 2009, reporting increase of 11.27 per cent, according to data released by the Central Board of Direct Taxes.
Meanwhile, the income tax department is optimistic to achieve revised tax collection target of Rs 3,45,000 crore despite tight conditions of financial market under the impact of global slowdown.
Government has so far achieved 70.93 per cent of the budget estimate target of Rs 3,65,000 crore and 76.37 per cent of the revised direct tax collection estimated target of Rs 3,45,000 crore.
Saumitra Chaudhury, a member of Prime Minister's economic advisory council, said, "The probability of a reversal in this trend in month in March is minimal. Even after considering the fact that tax inflows in last months of the fiscal are high, it will be difficult to meet the collection targets."