Net direct tax collections in the first two months of the present fiscal stood at Rs.22,840 crore, up from Rs.13,335 crore, registering a growth of 71.28 percent. Growth in Corporate Taxes was 68.05 percent (Rs.8,126 crore as against Rs.4,835 crore), while Personal Income Tax (including FBT, STT and BCTT) grew at 73.05 percent (Rs.14,690 crore as against Rs.8,489 crore). Tax deducted / collected at source continued to grow this fiscal at about 51 percent, i.e. the same level as in the last fiscal.
The robust growth in direct taxes has been achieved despite larger refund payouts at Rs.9,014 crore in the first two months of this fiscal as against Rs.5,037 crore during the first two months of last fiscal. In spite of manpower shortage, refunds were issued to over 48 lakh taxpayers last fiscal (2007-08) compared to about 44.5 lakh refunds in the previous fiscal (2006-07). It is the endeavour of the Income Tax department to provide better taxpayer services, particularly in the area of issuance of refunds. Therefore, the criteria for issuance of refunds to taxpayers without verification of TDS instruments has been further relaxed to gross TDS claims of up to Rs.5 lakh and net refund claim of Rs.25,000 per taxpayer. Under the relaxed criteria, about 92 percent of the refund claims for fiscal 2007-08 will be settled without asking the taxpayers to produce the TDS certificates / challans in cases of mismathch.
The first installment of advance tax for corporate taxpayers was due on 16th June (15th June being a Sunday). The trend of growth in advance tax will reflect in the tax collection figures for the month of June 2008.
Direct tax collections have been witnessing high growth due to better tax compliance by the taxpayers and an improved tax administration. The cost of collection, on the other hand, declined to an all-time low of 0.54 percent during 2007-08, among the lowest in the world.