Centre''s Net Direct Tax Collections Increases 42pc In April-August 2007

New Delhi: Helped by an increase in tax deductions at source-based collections, buoyant economic growth and improved compliance, the Centre''s net direct tax collections increased 42 per cent in April-August 2007 to Rs 61,030 crore as compared to collections of Rs 42,980 crore recorded in the same period last year. TDS collections increased 47 per cent on a year on year basis for the period under review and that there were signs of a reversal in the falling trend of the contribution of TDS to the overall direct tax kitty. The falling trend in TDS, seen in recent years, seems to be reversing during the current fiscal.

In 2005-06, TDS calculated for 28 per cent of the direct tax collections, lower than the 30 per cent level in the previous year. Advance tax collections increased 26 per cent in the first five months of the current fiscal on a year-on-year basis. Corporate tax collections during April-August 2007 increased 49.49 per cent at Rs 33,766 crore as compared to Rs 22,587 crore in the same period last fiscal. For the period under review, securities transaction tax (STT) collections increased 35.16 per cent and banking cash transaction tax (BCTT) grew 79.73 per cent. But buoyancy in economic growth alone cannot fully explain the 42 per cent growth in direct tax collections and nearly 50 per cent growth in corporate tax.