For the first time in the last three years, the Mumbai division of the income-tax department has collected Rs 252 crore excess tax over its revised target, due to higher tax collections backed by robust economic conditions.
The Mumbai department has so far collected Rs 153,243 crore, against the revised target of Rs 152,981 crore. The original target was Rs 150,000 crore, which was reviewed and revised last year on account of a general positive trend in the economy since the beginning of 2010-11.
Though the last date for paying advance tax is March 15, collection typically completes by the middle of April. I-T officials say Mumbai tax collection could likely cross Rs 154,000 crore in the coming days. If that happens, the Mumbai division will collect about Rs 4,000 crore in excess of the original target.
The picture was not very encouraging last year when Mumbai tax collection fell short by Rs 7,000 crore. About Rs 128,000 crore was collected, when the department was expected to collect Rs 134,000 crore.
The buoyancy in tax collection in Mumbai is largely in line with the increase in the all India tax collection which went up by 20% this fiscal year, according to the data collected till April 4.
Against the original all India projection of Rs 430,000 crore, the I-T department has so far collected Rs 4,41,500 crore. However, the all India collection fell short of the revised target of Rs 4,46,000 crore, by about Rs 4,500 crore. Yet the I-T department expects some more collection in the coming days which may fill up the gap between the actual collection and the revised projection.
A 20% increase in direct tax collection is the first time since the 2008 economic downturn, triggered by the collapse of financial services major Lehman Brothers. Direct tax collection had seen a drastic dip in 2008-09, despite a record 70% increase in tax collection in the first quarter.
As corporates started reporting lower margins, revenue authorities were left with no option than to revise the projection dowwards. The tax collection this time went up largely due to the buoyancy in the economy over the past year.
The rise in individual income and the corporate profit that went up by 25% are being cited the main reason for the significant rise in tax collection. Banks, insurance, steel, cement and engineering sectors reported substantial hike in their margins, sources in the I-T department said.