Finance minister asks I-T department to target Rs4,00,000 crore tax collection

Finance minister Pranab Mukherjee on Friday directed the income tax department to push for achieving the revised collection target of Rs4,00,000 crore during the entire fiscal year. The department's collection efforts have helped post an 8.5 per cent growth at over Rs2.5 lakh core till end-December.

However, indirect tax collections have fallen over 21 per cent to Rs1.26 lakh crore during the seven months of this fiscal, against Rs1.61 lakh crore a year ago with the government slashing excise duty by 6 per cent and service tax by 2 per cent to spur the economy hit by the economic downturn.
 
Addressing the All India Conference on Tax Deduction at Source (TDS) in New Delhi, Mukherjee noted that for achievement of the revised target, the department's field formations would need to take certain steps.

Apart from identification of new areas for tax collection these should regular interactions with central and state government authorities responsible for TDS, thorough scrutiny of cross-border transactions and monitoring deductions at the district level where massive social and infrastructure spending is being incurred by the government, he said.

Simultaneously, regular sharing of information amongst commissionerates to develop a common data base of new areas explored by each of them for collection of TDS needs to be undertaken, he added.

The minister pointed out that though TDS contribution to the net direct tax kitty had increased from 33 per cent to 38.5 per cent during the last five years, its share could be further stepped up when smaller towns were witnessing higher revenue collections due to economic buoyancy.

The finance minister said that while a globalised economy had created opportunities in terms of a world market for movement of capital, goods, services and human resources, there were also greater risks by way sophisticated tax planning tools for tax avoidance in developing countries. He added that in that context, the role of tax havens and low tax jurisdictions would remain an area of great concern for a country like India, which needed to mobilise resources to attack poverty and illiteracy.

Mukherjee stressed that the economy had started moving in the right direction with a sustained three-phased stimulus and expressed confidence that a growth rate above 7.75 per cent could be achieved during 2009-10.