Income tax collection is doing better than the Budget estimates. Mumbai has shown a growth of over 60% in tax collection this year. I hope Mumbai will do even better (next fiscal), Chidambaram said after inaugurating the Large Tax Payer Unit (LTU) here. According to a Mumbai Income Tax official, the tax collection till date stands at Rs 1,10,000 crore as against Rs 67,000 crore during the same period previous year.
Based on this growth percentage, we expect a total tax collection of Rs 1,45,000-crore the next fiscal or a contribution of 40% in direct tax collection, the official said. Chidambaram also said that Mumbai, which accounts for nearly a third of the countrys direct tax collections, has the potential for at least 150 large tax payers to join the LTU.
Eighteen such tax payers have so far signed up for the scheme.
He said India had the most cost-effective tax administration regime as the cost of collection of tax was 60 paise per Rs 100, which is the lowest in the world. In case of LTUs, the cost of collection will fall dramatically to 4.5 paise per Rs 100, he said.
Chidambaram said that the Delhi LTU would be opened in May whereas the one in Kolkata, by the latter part of this year. The LTU is a self-contained single window unit administering both direct and indirect taxes in respect of large business enterprises. All those assessees who have paid Rs 10-crore or more as advance income tax or Rs 5-crore or more either as excise duty or service tax are eligible to join the LTU. The scheme is, however, optional.