Economy on strong wicket as direct tax mop-up rises 8.5%
New Delhi: Direct tax collections during the nine-month period ending December 2009 rose by 8.5 per cent reflecting economic revival and better performance by corporates.
The collection of personal income tax, however, declined marginally by 0.41 per cent during the period in 2009-10 on account of larger refunds, said a Finance Ministry release.
Direct taxes, which include corporate tax, personal income tax, wealth tax etc fetched the exchequer Rs 2.5 lakh crore during April-December 2009-10 compared to Rs 2.30 lakh crore during the corresponding period previous fiscal.
The buoyancy in direct tax collections comes in the backdrop of the economy showing signs of revival despite the adverse impact of drought and floods in different parts of the country.
According to the latest data, the economy during the second quarter (July-September 2009-10) recorded a growth rate of 7.9 per cent. For the year as a whole, the growth rate may rise to about 8 per cent, up from 6.7 per cent during 2009-10.
If the growth trend continues, as projected by Finance Minister Pranab Mukherjee and Chief Economic Advisor Kaushik Basu, the government will meet the budgetary target of direct tax collection at Rs 3.7 lakh crore during 2009-10.
Mukherjee in his budget had projected 7.4 per cent increase in direct tax collections during the current fiscal.
Corporate tax collection during the three quarters grew by 13.47 per cent to Rs 1.66 lakh crore compared to the same period last fiscal, signifying economic upswing.
On the dip in personal income tax, the government said, " negative growth in income tax collections was largely on account of higher refunds at Rs 8,954 crore against Rs 5,979 crore, a growth of 49.76 per cent."
Corporate tax payouts for December grew by a whopping 44 per cent at Rs 53,293 crore compared to December last year. During the month total direct tax collections were Rs 66,410 crore compared to 53,347 crore in the last fiscal.
Securities Transaction Tax --- tax on transaction on the bourses -- was marginally up 2.33 per cent during April-December this fiscal.
Wealth tax also grew by 24.39 per cent to Rs 381 crore against Rs 306 crore in the same period last fiscal.