As subsidies swell, Pranab ups tax collection target

Banking on continued buoyancy in direct tax collections, finance minister Pranab Mukherjee has raised the direct tax collection target for financial year by Rs20,000 crore from Rs4.3 lakh crore to Rs4.5 lakh crore.

In an internal meeting of the Central Board of Direct Taxes (CBDT), the finance minister addressed 48 chief commissioners and directors general of income tax through video conferencing. He released a 'Vision document 2020' and asked the taxmen to target enhancing collection by at least Rs20,000 crore more than what has been budgeted for.

Mukherjee is counting on the tax bouyancy to meet additional expenditure on subsidy beucase of the rising commodity prices, helping him stay within the fiscal deficit target of 5.5 per cent of GDP. ''The finance minister has raised the target as tax collections are buoyant,'' said an income tax department official.

Direct tax collections have grown at 19 per cent in the first nine months of the current fiscal.

Corporate tax collections grew 21.3 per cent and personal income tax rose by 16.2 per cent in April-December 2010, with the total direct tax collections crossing the psychological mark of Rs3,00,000 crore.

Gross tax collections in April-November 2010 are up 27.4 per cent from a year ago against budget target of 18 per cent.