Finmin confident of exceeding target for direct tax collection

Encouraged by the revenue collections so far this year, the finance ministry has said it is confident of not only achieving the R5.32 lakh crore direct tax collection target for the current fiscal, but also of exceeding it.

The chairman of the Central Board of Direct Taxes (CBDT), Prakash Chandra said that the revenue collection target in the first quarter was conservative, adding that he expected the remaining period of the financial year to be good.

?I personally feel we are comfortable. Overall, our target is 19% and our experience has been that the first quarter is conservative. Our overall target is R5.32 lakh crore and I have absolutely no doubt that we will not only reach it but we will exceed it,? he said.

As on June 17 this year, gross direct tax collection stood at R1 lakh crore, an increase of 38%, as compared to the corresponding period last year.

However, due to refunds disbursal, the net mop-up was flat. The government has estimated to give R1 lakh crore refunds in the current financial year, out of which over R40,000 crore has been disbursed. ?For the next financial year too, refunds may be around R1 lakh crore,? he said.

Chandra expects advance tax to grow by 19% in the first quarter. However, what is encouraging for the CBDT is the Tax Deducted at Source (TDS) collection this year.

The corporate TDS has grown at a healthy rate, up 33% this year, while personal income tax TDS rose 26% this year from 13% in the same period last year.

?TDS is a more accurate indicator of the state of the economy as it is a transaction-based tax. Advance tax is based on estimates and likely to be understated. Overall TDS growth of 29% denotes healthy state of the economy. Strong corporate TDS growth confirms this trend,? said an official.

Asked about the difference between the CBDT and department of economic affairs on the issue of refunds, Chandra said, ?They (department of economic affairs) had some liquidity problem. We went ahead with our part of it. So there was a slight communication gap for some time.?

The department of economic affairs (DEA) had asked the Income Tax department to go slow on refunds. However, the suggestion was turned down by the revenue department.

Chandra said that a proposal that salary earners having an income of less than R5 lakh would not have to file tax returns was currently being vetted by the law ministry.

Answering queries on the panel headed by him on black money, he said the committee was examining all possibilities, including making tax evasion a criminal offence.