Net Direct Tax Mop Up Rise 47-Pc - Aug 07 , 2008

The net mop up of the Centre''s direct tax revenues witnessed a 46.95 per cent rise in the first four months of the current fiscal. The net direct tax collections was Rs 71,648 crore during April-July 31 this year as compared with Rs 48,756 crore collected in the same period last year. While corporate tax collections rose 50.08 per cent to Rs 41,598 crore (Rs 27,718 crore), personal income tax (including FBT, STT and BCTT) grew 42.82 per cent to Rs 29,982 crore (Rs 20,993 crore).

The strong growth in personal income tax collections has come in the backdrop of an increase in the threshold exemption limit of taxation from Rs 1.10 lakh to Rs 1.5 lakh and also an increase in the tax slabs in budget 2008-09. Growth in direct tax collection has been driven by a growth of 44.56 per cent in tax deducted/collected at source (TDS/TCS), which stood at Rs 45,935 crore as against Rs 31,776 crore in the earlier year. Growth in corporate TDS/TCS was particularly high at 60.6 per cent. Among regions, tax growth in Mumbai and Delhi was 36.33 per cent and 76.40 per cent, respectively.

Other regions with high tax growth are Nagpur (77.80 per cent); Kochi (58.08 per cent); Kolkata (49.87 per cent); Hyderabad (40.69 per cent) and Bangalore (40.25 per cent).

Budget With ET: India Inc May Get FBT Breather

NEW DELHI: Bruised by the fringe benefit tax (FBT) on stock option plans for their employees in the previous budget, corporates may expect some good news in the forthcoming one. The finance ministry is toying with a proposal to provide some relief to companies on FBT in the coming budget.

The move is in sync with finance minister P Chidambaram’s concern over slowdown in production of fast moving consumer goods (FMCG). There is a strong thinking that FBT on certain items, like sales promotion, should be pared or done away with completely to mitigate the pressures industrial sectors are witnessing due to a slowdown, sources said.

At present, sales promotion, travel and even gifts to customers in sectors like readymade garments, white goods, FMCG, small accessories and automobiles are under the FBT ambit. These expenses attract 30% FBT on 20% of the total amount spent. The industry has time and again demanded excluding these expenses from the tax ambit. If the proposal goes through, then companies may have to pay less FBT on certain items classified as fringe benefits.

Similarly, FBT on dealer meetings could be tweaked. Such meetings, industry has argued, are crucial in these sectors to promote sales. FBT is leviable even when a company does not have an income-tax liability. There is also a view that some exemption limit in terms of turnover should be prescribed for FBT levy.

Fringe benefits, as outlined in Section 115 WB of the Finance Bill, mean any privilege, service, facility or amenity directly or indirectly provided by an employer to his employees (including former employees) by reason of their employment.

The tax was introduced in the 2005-06 budget. FBT collections reflected the buoyancy in other direct taxes and grew by 64.79% to Rs 5,121 crore in April 2007 to January 15, 2008 against Rs 3,108 crore in the corresponding period last year.

Mr Chidambaram had excluded expenditure on free samples and displays from FBT even as he had brought Esops under the tax ambit.