Despite 8% rise to Rs 3.38 lakh crore
Author : Nivedita Mookerji/DNA
The day before the new government is to take over, there was good news flowing from the finance ministry.
According to its estimates, direct tax collection for the financial year 2008-09 has increased 8.33% over the previous year. The net direct tax collection in 2008-09 was Rs 3,38,212 crore, against Rs 3,12,202 crore in 2007-08.
Collection of direct taxes has grown over three times, from Rs 105,088 crore in 2003-04 an average annual growth of 26.75%. The average annual growth rate was much lower, at 18.86%, between 1990-91 and 2001-02.
However, if one was to consider direct tax as a percentage of GDP, India has witnessed a slight decline this year. Direct tax as a percentage of GDP is at 6.23% in 2008-09, against 6.61% during 2007-08. Going back, direct tax as a percentage of GDP was much lower, at 3.81% in 2003-04, 3.03% in 2001-02 and 2.10% in 1990-91.
As for corporate taxes, there's a growth of 10.84% over the previous year. In 2008-09, corporate tax worth Rs 213,823 crore was collected by the government, up from Rs 192,911 crore in the previous year.
Personal income tax (including fringe benefit tax and securities transaction tax) saw a rise of 4.26% in 2008-09, from Rs 1,18,904 crore in 2007-08 to Rs 1,23,967 crore in 2008-09. But while the fringe benefit tax was up 12.38%, the securities transaction tax dropped by 36.95%. Also, tax deducted at source for all categories (corporate tax, personal income tax and central government) has risen this year. Corporate tax deducted at source has grown 35.4% (Rs 61,683 crore in 2008-09 against Rs 45,450 crore in 2007-08, personal income tax deducted at source is up 16.3% (Rs 68,786 crore from Rs 59,145 crore last year), and central government TDS has increased 65.39% (Rs 3,364 crore from Rs 2,034 crore in the previous year).
The tax collection for 2008-09 includes an additional tax of Rs 31,242 crore (including arrears of Rs 10,016 crore and current tax of Rs 21,226 crore), due to tax demand raised by the IT Department. Meanwhile, the cost of collection of taxes has increased from 0.54% in 2007-08 to 0.66% in 2008-09. The cost of collection is among the lowest in the world.