Buoyancy in economy, improved compliance and rise in tax receipts
Aiming high:The Union Finance Minister, Mr P. Chidambaram, with the Revenue Secretary, Mr P.V. Bhide, during the 24th annual conference of the Chief Commissioners and Directors General of Income-Tax, in the Capital.
The Finance Minister, Mr P. Chidambaram, on Monday asked the Central Board of Direct Taxes (CBDT) to substantially revise upwards the direct tax collection target for 2008-09, in the wake of continued buoyancy in the economy, improved tax compliance and attendant jump in such tax receipts.
The Centres direct tax revenues have been buoyant, with collections having tripled over the last four financial years. The move to go in for a sharp upward revision in the budget estimates comes on the back of record direct tax collections in 2007-08, which saw a hefty increase of 36.6 per cent over the previous year
Officials told Business Line that against the Budget estimate of Rs 3,65,000 crore for the current fiscal, the Finance Minister had today impressed upon them the possibility of achieving Rs 4,00,000 crore tax receipts from direct taxes.
Even as the Finance Minister emphasised the need for higher direct tax collection targets, he also directed the officials to prosecute those non-filers and stop-filers (in last three years) found during search and survey operations.
We have given a general direction that if in a survey or in a search case, we find that the person has never filed a return (non-filer) or has stopped filing return (stop-filer) in the last three years, invariably such a case will be taken for prosecution. I am given to understand that 15 such cases have been taken for prosecution, Mr Chidambaram told reporters after addressing the 24th annual conference of Chief Commissioners of Income-Tax (CCIT) and the Director General of Income-Tax here.
Referring to this years direct tax target, he said that the CBDT would meet over the next couple of days and increase the estimate upwards. He highlighted that every estimate of economic growth for 2008-09 projects 8.5 per cent GDP growth this year.
Even if you take a 25 per cent increase over last years collection, the budget estimate must be revised upward very sharply. I am not giving you a number. I am confident that the Chairman and members will revise the budget estimate to a very substantial amount so that Government will be very happy with upward revision, Mr Chidambaram said.
The bid to revise upwards the direct tax collection target also comes close on the heels of the Centres decision to forego indirect tax revenues to the extent of Rs 22,600 crore during the next ten months of 2008-09 on account of the duty cuts to cushion the spurt in international crude oil prices. Mr Chidambaram said that there was tremendous demand for resourceshealth, education and social sector.
Meanwhile, the Finance Minister said that the income-tax department expects to receive over 3 crore income tax returns this year, substantially higher than the 2,73 crore returns received last year.
On new income-tax code, Mr Chidambaram said that the discussion paper was being written. On commodities transaction tax (CTT), he said that the date of its coming into force would be notified in due course.