Direct tax collection has improved marginally, with the gross growth rate at over eight per cent during April-December. However, it is still lower than the Budgeted target of 15 per cent.
A Finance Ministry statement said gross direct tax collections during April-December increased to Rs 4.28 lakh crore from Rs 3.96 lakh crore, showing a growth of 8.01 per cent.
However, with lower refund, net direct tax collection grew to Rs 3.68 lakh crore from Rs 3.24 lakh crore registering a jump of 13.7 per cent.
The Ministry aims to mop up Rs 5.70 lakh crore through direct taxes, which constitute personal income tax, corporate tax, securities transaction tax and wealth tax. Experts believe that with the slowdown in industrial activity, corporate tax collection may not be on expected lines, affecting overall direct tax collection.
Achieving the tax collection as targeted is crucial for capping the fiscal deficit within the revised target. The Budget projected the fiscal deficit at 5.1 per cent of GDP.
However, the Finance Ministry has revised this to 5.3 per cent. Even this is unlikely to be achieved, until the Government gets more non-tax revenue and cuts expenditure, especially non-Plan, research agencies said.
Meanwhile, the Government has taken a tough stand against tax evaders. Last month, the Revenue Secretary, Sumit Bose, said that the Government would urge all assessees to disclose their true income.
There is no advantage in suppressing the true income or avoiding paying income tax because, sooner than later, the information available with the Income Tax Department will lead the department to the doors of such persons, he had warned.