Finance Ministry Raised Direct Tax Collection Target

The Indian Ministry of Finance on 5 January 2011 raised the direct tax collection target for financial year  2011 by Rs 20000 crore to Rs 4.5 lakh crore after a video conference with the chief commissioners of income tax. The decision was taken considering healthy growth in direct taxes collections. Finance Minister, Pranab Mukherjee is currently counting on the tax bouyancy to meet additional expenditure on subsidy beucase of the rising commodity prices. It is also expected that Indirect taxes target will be revised in keeping with the over 45% growth in collections in the first April-November 2010 from a year ago.

Direct tax collections grew at 19% in the first nine months of the current fiscal -2010-11. Corporate tax collections grew 21.3% and personal income tax rose by 16.2% in April-December 2010 with the total direct tax collections crossing the psychological mark of Rs 300000 crore. Gross tax collections in April-November 2010 moved up 27.4% from a year ago against budget target of 18%. The higher tax collections will come handy as the governments subsidy bill is expected to cross the budget estimates following a spike in global commodity prices.