New Delhi, May 06: The government’s direct tax collections crossed a record Rs 104,600 crore in the just ended fiscal. It was not a widening of the tax base that led to the surge, but a deepening of the base. Corporates have bailed out the government, paying substantially higher amounts as tax, on the back of improved profitability. New assessees filing income tax returns, particularly under the one-by-six scheme can be potential tax payers. But the finance ministry, which gave considerable importance to tax widening measures a few years ago, clearly did not focus on these measures in the last fiscal. The one-by-six scheme was introduced by former Finance Minister Yashwant Sinha in 1998 as a modification of the one-by-four scheme. The on-by-four scheme had been announced earlier by P Chidambaram, when he was finance minister in the United Front government, to bring more assessees under the tax net.
In ’01-02, the scheme was modified and extended to all urban areas. Consequently, a record 57 lakh new assesses were added in that fiscal. Of these, close to 32 lakh were filing returns under the one-by-six scheme. The number of new assessees dropped to 31 lakh in ’02-03, of which nearly 5 lakh were filing returns under the one-by-six scheme. The implementation of the one-by-six scheme required deploying administrative machinery. The scheme has been put on the back burner, at least going by the trends last year. The number of new assesses added to the existing base is the lowest since 1995-96. Only 8 lakh assesses were added to the existing base of 33 lakh, taking the total number of assesses to 340 lakh (3.4 crore). The income tax collection target was scaled down, from Rs 44,070 crore in the budget estimates to Rs 40,269 crore in the revised estimates. Corporate tax collections topped with Rs 63,882 crore, which was higher than the budget and the revised estimates.
Bureau Report