Large corporates will now find it difficult to defer their advance tax payments as the Central Board of Direct Taxes (CBDT) has decided to monitor advance tax payments by top companies and persuade them not to defer such payment as self-assessment tax for the next financial year.
The CBDT convened a meeting of chief commissioners of income-tax on Friday to discuss strategies for achievement of revenue collection target budgeted at Rs3.7 lakh crore for the current financial year (2009-10) and internally reset at Rs4 lakh crore.
Strategies discussed in the meeting also included monitoring of tax payments of loss-making companies subject to minimum alternate tax (MAT) at the higher rate of 15 per cent and persuading them for payment as advance tax in the current financial year. It was also decided to monitor tax deducted at source (TDS) deposits by private deductors as also of state governments and local bodies.
According to sources close to the finance ministry, trends from excise receipts had also shown a welcome rise in January, compared to a year ago. They say with these as also receipts from disinvestment there would be significant additional income in a year at a time when the finance ministry was struggling to keep the fiscal deficit within the 6.8 per cent GDP budget estimate.
The government collection of tax arrears would also be an area of focus as also tax demand raised in scrutiny assessments during 2009-10.
According to a finance ministry statement the meeting was addressed by CBDT chairman S S N Moorthy and newly-appointed revenue secretary Sunil Mitra.
Direct tax collections in the first nine months (April-December) of 2009-10 were up 8.51 per cent to Rs2,50,232 crore, compared with Rs2,30, 598 crore in the same period last financial year on corporate tax collections even as receipts of personal income-tax were down.
The revenue department would have to collect over Rs1.2 lakh crore in direct taxes over the next three months to meet the target of Rs3.7 lakh crore.
Last year, the government had not been able to achieve the Rs3.45 lakh crore target due to the economic slowdown, however, this year it is betting on direct tax collections to make up for any shortfall in indirect tax receipts, which would also likely miss the target.