Thanks to buoyancy in tax deducted at source (TDS), net direct tax collections shot up 53% to Rs 41,412 crore till June 21 in the fiscal ending March 31, 2008.
TDS collections rose 44.5% to Rs 23,774 crore between April 1 and June 21 this fiscal when compared with Rs 16,453 crore in the same period last year.
"Higher TDS collections were due to overall buoyancy in the economy, better pay packages in the private sector, more investment and expenditure," an Income Tax department official said.
Corporations paid 26% more in advance taxes at Rs 17,514 crore as against Rs 13,884 crore in the same period of the last fiscal.
Gross direct tax collections were up 26% at Rs 49,371 crore during the period under review as against Rs 39,203 crore in the same period a year ago.
Besides increase in overall collections, lower refunds so far this year also contributed to the high growth in net collections. Refunds were down 53% to Rs 7,959 crore from Rs 12,207 crore in the same period last year.
Direct tax collections are expected to be the top revenue grosser this year replacing the dominance of indirect taxes. The direct tax to GDP ratio will also be higher than the indirect tax to GDP ratio this fiscal.
Direct tax collections, which rose a whopping 39% in 2006-07, have grown by an average 29% in the last four years compared to the 17% growth in indirect tax collections.
As per the average growth experienced in recent years, direct taxes could fetch Rs 2,96,817 crore, while indirect taxes would generate Rs 2,83,638 crore in 2007-08. The Budget estimate for direct tax collection is Rs 2,67,490 crore for 2007-08. Going by the strong growth so far this fiscal, direct tax collection is likely to be close to Rs 3,00,000 crore in 2007-08.