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INDIA BUSINESS WORLD - November 16th December 31st 2008
DECEMBER ADVANCE TAX MOPUP SLIPS 22%, I-T DEDUCTED AT SOURCE SHORES UP AGGREGATE COLLECTIONS
INDICATING slowdown in economic growth, advance tax collections declined in the third quarter, ending December, by over 22% to Rs 42,600 crore from Rs 54,900 crore a year ago. For the first three quarters ended December 15, advance tax collection fell by 2.6% to Rs 1, 13, 000 crore from Rs 1,16,000 crore in the corresponding period last year, a finance ministry official who did not wish to be identified said.
This brings down the growth rate in direct tax mopup for April-December to 12% and raises the possibility of the government missing the budget target of a 15% rise in direct tax collections to net Rs 3,65,000 crore this fiscal. Personal income tax deducted at source has shored up aggregate collections of direct taxes, which comprise taxes on corporate incomes (including dividend distribution tax and fringe benefit tax), taxes on personal incomes, securities transaction tax and a minuscule amount of wealth tax, apart from arrears on these counts.
Advance tax is paid in four instalments by corporate and non-corporate assessees other than salaried employees in June, September, December and March and is based on the taxpayers’ own estimates of their incomes. It thus gives an indication of overall economic health. The last date for payment of the third instalment of advance tax was December 15. The fourth and the last instalment will fall due on March 15. Salaried employees have their tax deducted at source on a monthly basis.
Direct tax collections in November 2008 had dropped 36.09% to Rs 10,346 crore from Rs 16,189 crore in November 2007.
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