Net direct tax collections during first seven months of the present fiscal (up to October 2008) stood at Rs.166,905 crore, up from Rs.128,864 crore, registering a growth of 29.52 percent. Growth in Corporate Taxes was 33.49 percent (Rs.105,174 crore as against Rs.78,785 crore), while Personal Income Tax (including FBT, STT and BCTT) grew at 23.14 percent (Rs.61,433 crore as against Rs.49,890 crore). The momentum of growth in direct taxes could be maintained, despite present global financial crises / recession and its resultant impact on the Indian economy, mainly on account of a shift in the tax collection strategy of the Central Board of Direct Taxes (CBDT) towards improving the tax deduction at source (TDS) mechanism and encouraging better tax compliance, reflected in growth of 35.78 percent in TDS and 52.76 percent in self-assessment tax. Growth in Corporate TDS was 48.2 percent at Rs36,004 crore as against Rs.24,293 crore in the same period last year. Despite substantial tax relief allowed to individual taxpayers in the Union Budget 2008, growth of PIT TDS was 26 percent at Rs.38,868 crore as against Rs.30,845 crore in the same period last year.
Growth in corporate TDS above 48 percent, growth in Fringe Benefit Tax (FBT) above 47 percent and growth in dividend distribution tax above 48 percent indicate continued strength of the Indian economy. Growth in Securities Transaction Tax (STT), however, at minus 1.60 percent was reflective of humungous erosion in values of stock markets transactions.
Despite lower advance tax payments by certain sectors such as real estate, infrastructure, cement, automobile, power, textile and downstream oil companies, advance taxes recorded positive growth in mining, mineral, metal, engineering, Indian banking, telecom, IT, pharma, and consumer goods sectors.
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