For the second year in a row, the income tax department in Gujarat collected much lower taxes than expected. With a shortfall of around Rs 2,000 crore in TDS (tax deducted at source) collections, overall I-T collections fell short by Rs 3,200 crore. Against the target of Rs 34,090 crore for the 2014-15 fiscal, the department had collected Rs 30,900 crore till Thursday.

Except Ahmedabad city, all commissionerates in the state and various wings of the department failed to meet their respective targets. Although, in 2014-15, advance tax collections recorded a growth of 18% from last fiscal.

Gujarat government Rs 4k crore short of tax target
"The reason for shortfall in TDS is largely because several companies have shifted their TDS accounts outside Gujarat to places like Mumbai, Delhi, Bangalore and Ghaziabad. This shifting of accounts cost us nearly Rs 1,500 crore in revenue," said a source in the income tax department.

"Every year, the tax target is increased by 10%-15% and with the slowdown affecting industries, collections have fallen. Now that the economy is showing signs of improvement, we expect better collections in the next fiscal," said an income tax official. For 80% of their collections, the department depends on major corporate houses as well as public sector companies.

In 2014-15, income tax department gave refunds to the tune of Rs 4,400 crore, 35% up from previous fiscal when it stood at Rs 3,200 crore.

"Last year, collections were also affected due to cadre restructuring, which continued till December. Also, in the first quarter, several officials were deployed on election duty," added an IT official.