The Centre?s direct tax collection has maintained pace with rising profitability of the corporate sector and higher earnings of individuals increasing by 18% till mid-December this year to inch closer to Rs 3 crore mark giving hope to the Centre that its Budget target of Rs 4.3 lakh crore direct tax collections for fiscal year 2010-11 could be met.
The net direct tax collections, led majorly by the December tranche of advance tax payments by Indian corporates, touched Rs 2.96 lakh crore till Decmber 15 this year, a finance ministry official said. This includes the central tax deduction at source (TDS) of almost Rs 3,000 crore. The collections this year so far compares favourably with direct tax mop up of little over Rs 2.47 lakh crore in the same period of previous financialial year.
While corporate tax payments in the April-December period has grown over 21%, personal income tax grew by over 16% when compared to the corresponding period last year, the official said.
The Centre has already collected Rs 2.35 lakh crore from the corporate sector so far and with bulk of payment coming in the fag end of the financial year, corporate tax collections are expected to maintain pace in the coming months.
The finance ministry official said if the pace of direct tax collection continued till March next year, the Budget target of Rs 4.3 lakh crore may well be surpassed. However, the refund outgo of almost Rs 45,000 crore this year could reduce the net collections substantially. The total refunds were Rs 37,500 crore last year till December.
The advance tax payments of top 100 corporates in terms their payments grew by 16.3% in the April-December period this financial when compared to the corresponding period last fiscal. Among the companies, Mukesh Ambani-controlled Reliance Industries saw a near 43% increase in the third installment of advance tax to around Rs 1,200 crore. The state-owned oil companies, however, seem to be burdened by the impact of under recovery due to their inability to raise retail prices of cooking and auto fuel in line with global crude petroleum price movement. As a result, Indian Oil Corporation saw its payout fall by over 70% from around Rs 350 crore to around Rs 100 crore. Bharat Petroleum was at the other extreme and did not pay any advance tax. The advance tax payment of two of country’s largest maharatna PSUs?NTPC and SAIL has also fallen. For the Tata Group, the turnaround seems to have been complete with Tata Steel (54% rise to around Rs 1,000 crore), Tata Motors (120% to Rs 220 crore), TCS (30% to Rs 230 crore), and consequently, Tata Sons (100% rise to Rs 40 crore) seeing a sharp surge in their advance tax payment.