The Hindu Business Line : Higher TDS mop-up lifts direct tax receipts 71% in April-May

New Delhi, June 18 Aided by higher tax deduction at source (TDS) collections arising from better tax administration and widening tax payer base, the Centre’s net direct tax collections recorded a 71.28 per cent increase during the first two months of the current fiscal to Rs 22,840 crore against Rs 13,335 crore in the same period last year.

Personal income-tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) grew 73.05 per cent in April-May 2008 to Rs 14,690 crore (Rs 8,489 crore). Corporate tax collections during the first two months of the current fiscal grew 68.05 per cent to Rs 8,126 crore (Rs 4,835 crore).

The UPA Government’s strategy of moderate and stable direct tax rates has paid rich dividends in the last four years, especially in terms of better compliance.

The tax payer base has increased from 3.08 crore in 2004-05 to 3.27 crore in 2007-08. The high rates of economic growth have also helped and the revenue department is looking to raise about Rs 4 lakh crore from direct taxes this fiscal.

The robust collection performance in April-May 2008 has come in the backdrop of Budget 2008-09 announcements on personal income-tax, when the threshold limit of exemption was hiked to Rs 1.5 lakh for all assessees. The 71.28 per cent increase in net direct tax collections has been achieved despite larger refund payouts at Rs 9,014 crore in the first two months of the current fiscal, a CBDT official said.

An official release said that TDS/tax collected at source (TCS) continued to grow this fiscal at about 51 per cent.