DIRECT TAX MOP-UP MAY TOP RS 3 LAKH CR THIS FISCAL

Personal income tax contributions and tax paid by companies are expected to cross Rs 3 lakh crore this fiscal year, much beyond the target of Rs 2,67,400 crore set in the budget.The higher collection is being attributed to a 50-per cent growth in personal income tax collections and a 39.84-per cent growth in corporate tax collections up to December 2007.Giving out the direct tax collections figures for the first nine months of the 2007-08 fiscal, the Finance Minister, Mr P. Chidambaram, told reporters at his North Block office that direct taxes had now emerged as the largest contributor to the exchequer.“Direct taxes have now certainly crossed the indirect taxes in terms of contribution. It will contribute more to the exchequer this year than indirect taxes. The moral of the story for the tax department is to continue to be taxpayer-friendly and to emphasise voluntary tax compliance. The moral of the story for the taxpayer is you are better off if you pay your taxes”, he said.The Finance Minister, however, parried questions on whether he would look at moderating direct tax rates in the forthcoming budget, which would be his fifth for the UPA regime, on the back of buoyancy in revenues.“Let me recall what I had said earlier. I had said that if voluntary compliance increases, there is a case for moderation. Does it mean the case has been accepted? No…”, Mr Chidambaram said. In case of indirect taxes, though excise has been a low contributor this year, the Finance Minister was confidentthat budget targets for 2007-08 on both direct and indirect taxes would be met and that the tax-GDP ratio target of 11.8 per cent would be exceeded. Customs and service tax collections are expected to make up for any shortfall in excise collections. In April-December 2007, net direct tax collections stood at Rs 2.05 lakh crore, registering a growth of 42.36 per cent. Personal income tax collections (including STT, FBT and BCTT) grew 50.06 per cent to Rs 77,380 crore. Corporate tax collections registered a 39.84 per cent increase at Rs 1,27,683 crore.Outlining some of the taxpayer-friendly initiatives that are on the anvil, Mr Chidambaram said that the refund banker scheme, which has helped in speeding up refunds this year, was being extended to cover all non-corporate taxpayers.Moreover, the facility of electronic payment of direct taxes, which is now available through 12 agency banks, is likely to be extended by 12 more banks.All taxpayers having e-banking facility through these banks can pay their taxes online. The tax return preparer (TRP) scheme, launched to help small taxpayers comply with tax laws, is being extended with more TRP certifications this year.

Draft I-T code

On the proposed new income tax code, the Finance Minister said he had decided to release the draft code along with a discussion paper.The nearly 60 page discussion paper would spell out why the new code was being written and what were the changes between the old law and the proposed new law.“The new income tax code will be released (for discussion) only along with the discussion paper. The draft discussion paper is about 70 pages. I am trying to compress it to 50-60 pages. I have cleared only 25 pages which means it will take a few more days to clear. Once the discussion paper is ready, it will be put out along with the code for discussion. When that will happen, I can’t say”, he said – www.hindubusinessline.com