The Hindu Business Line : Chidambaram may peg higher revised estimates for direct taxes

Advertisement

New Delhi Feb. 27 Reaping dividends from strong economic growth and last Budget's move to shorten time limits for completion of assessments, the Finance Minister, Mr P. Chidambaram, is expected to peg revised estimates for direct tax collections in 2006-07 at over Rs 2,30,000 crore.

This would represent an increase of over Rs 20,000 crore to the budgeted target of Rs 2,10,684 crore, sources in the Income-Tax Department said.

Revised time limits

The Centre's direct tax collections grew 39.5 per cent in April-February 15 this fiscal to Rs 1,61,777 crore (Rs 1,15,788 crore). In Budget 2006-07, the Government had revised the time limits specified for completion of assessments so that the demands raised in a financial year could be collected in the same year.

The time limits were reduced by three months, thereby requiring the tax department to complete the assessments in respect of returns filed for assessment year 2004-05 by December 31, 2006 rather than the earlier specified Mach 31, 2007.

Collections

"The current demands raised for this year (pertains to returns of assessment year 2004-05) is about Rs 45,229 crore. We expect at least 25 per cent of this demand to translate into collections this year itself. Already, Rs 4,754 crore out of this demand has flown into the coffers and we expect another Rs 7,000 crore by March-end," official sources said.

Of the demands of Rs 45,229 crore that have been raised up to December 31, 2006, the demand on the corporate sector stood at about Rs 33,400 crore and about Rs 11,800 crore on the personal income-tax front.

Once the demands are raised, tax assessees have 35 days time to deposit the tax unless they challenge the demand notices at an appellate level.

In fiscal 2005-06, the tax department had raised demands (up to March 31) of Rs 58,000 crore.