FM calls for expanding direct tax kitty target to Rs 4 lakh crore
Close on the heels of introducing stringent austerity measures to control wasteful spending, the government is now eyeing higher collections from direct taxes.
By TNN |
NEW DELHI: Close on the heels of introducing stringent austerity measures to control wasteful spending, the government is now eyeing higher collections from direct taxes. Finance minister P Chidambaram on Monday said the budget estimate of Rs 3,65,000 crore for direct tax collections would be revised ���substantially���. The new target could be set at about Rs 4,00,000 crore.
���Given the actual collection during 2007-08 at Rs 3,14,468 crore, I have asked the Central Board of Direct Taxes to quickly revise upwards the (budget) estimate. The estimate will no longer be Rs 3,65,000 crore. The CBDT will meet over the next couple of days and increase the estimate,��� Mr Chidambaram told reporters after inaugurating the two-day annual conference of Chief Commissioners of Income Tax here.
Though, the government has cited higher tax collections of Rs 3,14,468 crore in 2007-08 as the reason for revising the target, the pressures on the country���s overall fiscal situation is evident. While the government will lose revenue of about Rs 27,000 crore on account of the oil package(duty cuts on petroleum products) and the inflation package, its overall expenses are expected to go up with the debt waiver package, implementation of Sixth Pay Commission recommendations, increased spending on key schemes like NREGS.
���Even if you take a 25% increase over last year���s collection of over Rs 3,14,468 crore, the budget estimates must be revised upward very sharply,��� he said. A 25% growth over the last year���s collection will push the estimate of direct tax collection to over Rs 3,92,000 crore. When asked as to what is the rationale of being so upbeat on direct tax collection despite fear of slowdown in economic growth, Mr Chidambaram said that ���every estimate says that economy will still grow at 8.5 % this fiscal���.
Complimenting the income tax department for record tax collection, Mr Chidambaram said during the four years of UPA government, the collections had tripled from Rs 1,05,088 crore in 2003-04. The cost of tax collection had also come down to 0.54%, which was the lowest in any jurisdiction in the world, he said.
He said the government was emphasising on voluntary tax payment and this was evident in the increase in Tax Deduction at Source (TDS) (51%), advance taxes (33.6%) and self-assessment tax (62%) last fiscal, while post assessment declined by 5%.
Pointing at non-compliance of tax deduction at source (TDS) rules by some ministries, he said, ���We are not happy with TDS deductions in the Defence Ministry and Railways Ministry. We are taking steps to sensitise the authorised deductors in the government sector to comply with law and improve the TDS.���
On the proposed Income Tax Code, that is supposed to replace decades-old Income Tax Act, he said, ���The code is ready. Discussion paper is being written.
���Given the actual collection during 2007-08 at Rs 3,14,468 crore, I have asked the Central Board of Direct Taxes to quickly revise upwards the (budget) estimate. The estimate will no longer be Rs 3,65,000 crore. The CBDT will meet over the next couple of days and increase the estimate,��� Mr Chidambaram told reporters after inaugurating the two-day annual conference of Chief Commissioners of Income Tax here.
Though, the government has cited higher tax collections of Rs 3,14,468 crore in 2007-08 as the reason for revising the target, the pressures on the country���s overall fiscal situation is evident. While the government will lose revenue of about Rs 27,000 crore on account of the oil package(duty cuts on petroleum products) and the inflation package, its overall expenses are expected to go up with the debt waiver package, implementation of Sixth Pay Commission recommendations, increased spending on key schemes like NREGS.
���Even if you take a 25% increase over last year���s collection of over Rs 3,14,468 crore, the budget estimates must be revised upward very sharply,��� he said. A 25% growth over the last year���s collection will push the estimate of direct tax collection to over Rs 3,92,000 crore. When asked as to what is the rationale of being so upbeat on direct tax collection despite fear of slowdown in economic growth, Mr Chidambaram said that ���every estimate says that economy will still grow at 8.5 % this fiscal���.
Complimenting the income tax department for record tax collection, Mr Chidambaram said during the four years of UPA government, the collections had tripled from Rs 1,05,088 crore in 2003-04. The cost of tax collection had also come down to 0.54%, which was the lowest in any jurisdiction in the world, he said.
He said the government was emphasising on voluntary tax payment and this was evident in the increase in Tax Deduction at Source (TDS) (51%), advance taxes (33.6%) and self-assessment tax (62%) last fiscal, while post assessment declined by 5%.
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Pointing at non-compliance of tax deduction at source (TDS) rules by some ministries, he said, ���We are not happy with TDS deductions in the Defence Ministry and Railways Ministry. We are taking steps to sensitise the authorised deductors in the government sector to comply with law and improve the TDS.���
On the proposed Income Tax Code, that is supposed to replace decades-old Income Tax Act, he said, ���The code is ready. Discussion paper is being written.
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