It was a year of downturn, but the government still managed to collect Rs 26,000 crore more in the form of direct taxes than what it had done in the previous fiscal. The total direct tax collection stood at Rs 3.38 lakh crore in 2008-09, registering a growth of 8%.
In what is being considered as an indication of the robustness of the Indian industry, the Central Board of Direct Taxes (CBDT) on Thursday said the component of corporate tax witnessed a significant growth of nearly 11%. Of this, the tax deducted at source (TDS) by these corporates swelled by more than 35% to Rs 69,000 crore against Rs 59,000 crore in the previous year.
The increase in corporate TDS is indicative of the good health of the industry and the fact that they have enhanced capacity in the slowdown period and have been spending more despite the global financial meltdown.
The downturn, however, has slowed down the rate of growth. Before the slowdown, the growth in tax collection was at an average annual rate of 30%-40%. In 2008-09, net direct tax collection was Rs 3,38,212 crore, up from Rs 3,12,202 crore during 2007-08, registering a growth of 8.33%.
The total corporate tax collection was Rs 2,13,823 crore as against Rs 1,92,911 crore in the previous year. The personal income tax, including Fringe Benefit Tax (FBT), Security Transaction Tax (STT) and Banking Cash Transaction Tax (BCTT), grew at 9% at Rs 1,23,967 crore as against Rs 1,18,904 crore in 2007-08.
Despite the fact that indexes saw erosion in value for more than 50%, the net STT collection was Rs 5,408 crore. It was 37% less than last year's Rs 8,577 crore. Growth in FBT was 12% -- Rs 7,997 crore as against Rs 7,116 crore in the previous fiscal.
Central revenues, both direct and indirect taxes put together, grew by Rs 11,000 crore in 2008-09. While there was growth in the direct tax collections, the indirect taxes that include excise, service tax and customs duty slipped into negative domain. The indirect tax collections were Rs 15,000 crore less than the previous year.