Direct tax collections up 6.59% in April-October

NEW DELHI: Direct tax collections rose 6.6% in the first seven months of the current financial year from a year ago, underlying Indian economy's struggle with growth.

However, net direct tax mopup, or what government takes home after paying refunds, rose 14.6%, ahead of the target of 13.9% rise assumed in the budget. This suggests, unless there is spike in refunds, the government is on course to meet its direct tax target for the year.

Indian companies paid only 2% higher tax in April-October 2012 over the comparable period last year, suggesting stagnant profit growth because of the economic slowdown. The government expects that in the worst case scenario growth could drop to 5.5% in the current year, a ten year low.

Personal tax payments were up a robust 15.8% in April-October, as slowdown tends to impact salaries with a lag.

Net wealth tax collections rose 26% but securities transactions tax was down 15.4%. Net direct tax collection in the April-October was Rs 2.5 lakh crore, nearly 44% of the budgeted amount for the year, almost same as last year.