Tax deducted at source (TDS) collections in Mumbai for the April-September period have crossed last years figure with income-tax collections showing an 8% increase, according to figures available till last week.

Income-tax officials said if the economic recovery continues for the remaining part of the current fiscal year, TDS collections as well as regular tax collections could end up on a higher note.

Mumbais TDS collections, a major portion of which comes from salaries and contract payments, totalled Rs 21,510 crore till last week. The corresponding figure last year was Rs 19,888 crore.

TDS typically constitutes a significant portion of corporate tax collection. Nearly 30-40% of the tax collected is usually by way of TDS. In the last fiscal year, 40% of the tax collected from Mumbai was from TDS. This was largely due to the special drive carried out last year by the TDS Commissionerate, for augmenting tax collection.

It was during this time that the commissionerate for TDS sent a tax demand of Rs 900 crore on General Insurance Company and other non-life insurance companies, asking them to pay tax on commissions paid for reinsurance.

Interestingly, TDS collection last year had its highs and lows. While it went up by 70% till September last year when the economy was on high gear, it slid sharply during the rest of the fiscal after the Lehman Brothers collapse triggered a worldwide slide in the credits market.

It was still up by about 6% by December 2008, but despite efforts made by the Income-tax department to halt the fall, TDS collections fell by 10% towards the end of the fiscal year. The Mumbai income-tax department which was expected to collect Rs 150,000 crore, couldnt cross even Rs 120,000 crore.

According to people connected with the income-tax department, actions carried out last year to bring under the tax net, defaulting companies and companies who wanted to stay out of the TDS net, has had a positive effect this year too. If the economy continues to tread the recovery path, TDS figures for the current fiscal could be still higher, officials said.