Till the other day, the Central Board of Direct Taxes (CBDT) was confident about meeting the direct tax collection targets. Now, though, it has turned apprehensive. Reason: Sluggish performance of manufacturing and other industry sectors.
The indications, as a senior CBDT official said, are that the tax collection would be under pressure in the coming months. It will be difficult to meet the target of collecting 10 per cent more than the budget estimate fixed by Finance Minister Pranab Mukherjee, he told Business Standard.
Nonetheless, additional efforts being made this year for enhancing revenue realisation could help the income tax department help achieve the budget target of Rs 5.33 lakh-crore, he added. The department is now pinning its hopes on the second instalment of advance tax payment due on September 15.
The sentiments expressed by the industry in last few weeks are not very encouraging, said the CBDT official. The advance tax payments till September 15 will provide a clear indication on the trend in coming months, he pointed out, adding that refunds in the initial months of the current financial year had also impacted the net direct tax collection in a major way.
The net direct tax collections during this April-July declined 8.1 per cent to Rs 78,679 crore, against Rs 85,647 crore in the same period of 2010-11. The decline was due to a 183.2 per cent rise in tax refunds, which stood at Rs 53,863 crore till July, against Rs 19,021 crore in the same period last year. Gross direct tax collections during the April-July period rose 26.63 per cent to Rs 1,32,542 crore, against Rs 1,04,668 crore in the corresponding period of 2010-11.
As part of its strategy to boost tax mop-up, the CBDT has decided to monitor advance tax collection by identifying cases where additions were confirmed in first appeal. It has also asked the chief commissioners to monitor advance tax payments of top cases.
Assigning quarterly targets for disposal of pending cases, recovery of arrear demand by identification of actionable cases, augmentation of TDS (tax deducted at source) revenue and survey of selected business segments are among the other steps taken by CBDT to achieve this objective.
The department has also decided to step up cross-verification of data collected through annual information return (AIR) with the return of income and issuance of notices in the cases where there was a possibility of tax evasion.