The net direct tax collection rose by just 7% to R1.94 lakh crore in the first half of the current fiscal as compared to the corresponding period last year, endorsing slowdown fears. The collection during April-September period is nearly 36% of the target estimated for 2011-12.
The budget target was for a 19% growth in direct tax collection.
The moderate growth is also due to a muted increase in corporate tax collection in the first half of the current fiscal. The mop-up from corporate tax increased just 3% to R1.26 lakh crore as compared to corresponding period last year. On the other hand, there has been a growth of 15.7% to R68,359 crore in the personal income tax category.
The volatility in markets has hit the mop-up from securities transaction tax, which has registered a 13% decline to R2,500 crore during April-September this year.
According to a finance ministry official, the huge refunds of R62,230 crore is the reason for the muted growth in net collection. ?The net mop-up is moderate. However, the gross collection has registered a robust growth,? the official said. During April-September this year, the overall gross collection rose by 23% to R2.57 lakh crore. This is on account of 23% increase in both gross corporate and personal income tax category.
The government is eying on arrears collection and better administration of tax deducted at source mechanism to achieve its target. During April-September this year, the income tax department mopped up R16,000 crore from arrears as compared to R6,000 crore collected during the corresponding period last year. ?We plan to mop-up R26,000 crore from arrears in the current year. Such measures would help in meeting the overall collection target for the current fiscal,? the official said.
During April-August this year, the direct tax mop-up stood at R96,738 crore, which was 3.3% less than the corresponding period last year.
The positive figure during the month is due to second installment of advance tax, which was due by September 15.
The advance tax collections paid by corporates witnessed a growth of 13% to R68,000 crore in the second quarter of the current fiscal as compared to the corresponding period last year. However, the bigger companies performed badly than the smaller ones as top 100 companies? tax payment increased by just 10% as they paid R31,700 crore as advance tax.
In comparison, advance tax receipts by India Inc in the first quarter of the current fiscal were up 19% year-on-year, while in the corresponding quarter last year, the growth was higher at 33%.
