Union Finance Minister P Chidambaram on Monday said that a two-day meeting would be convened with the members of Central Board of Direct Taxes (CBDT) for discussing the issue to revise the target upward of direct tax collection as this year direct tax collection has surpassed the indirect tax collection by whopping Rs. 34,000-crore.
The Ministry has targeted to achieve direct tax collection of Rs.3,65,000 crore for the current fiscal 2008-09 as per Finance Minister informed. This year government has collected Rs.3,14,468-crore, 117% more as against original budget estimate for this fiscal.
The CBDT has released the data of total direct tax collection revealing that the collection cost of direct tax has been reached all time low. This year, CBDT has spent Rs.0.54 for collection every Rs.100 illustrating the lowest amount spent in the world.
On the other hand the total direct tax collection was Rs.44,600-crore in 1998-99 whereas the collection cost percentage was 1.90 and in 2003-04, the total direct tax collection has been reached Rs.1,05,088-crore at 1% of spent cost collection.
The data show that in just four years, the total direct tax collection has triplets while the cost collection percent was reduced to half level.
If this trend continues with 40 percent ratio, India would meet the fiscal deficit target and blunt the effect of increasing oil bills and other subsidies.
The Direct tax collection includes income tax, Tax Deduction on Sources (TDS), sales taxes tax on property etc. According to Income tax department stats, there was a base of 1.7 crore assesses in 1998-99, which has gone to 3.5-crore in last fiscal while the gross domestic product (GDP) ratio has also been increased from 2.68% in 1999 to 6.67 per cent in 2007-08.
The TDS has risen to 51% in last fiscal while advance tax hiked 23.6% and self-assessment tax by 62 per cent, the sources reveals.
In a two-day meeting, FM will discuss the report on Business Process Reengineering (BPR) prepared by PricewaterhouseCoopers, besides discussing over revising the target, providing more services for taxpayers and other tax matters.