Direct tax mop-up crosses revised estimates

Finance minister P Chidambaram has something to cheer as efforts to shore up tax revenue have shown results, with the direct tax collection set to exceed the revised estimate.

Direct taxes collection of the central government totalled Rs6,37,000 crore in 2013-14, against the revised estimates of Rs6,36,000 crore.

Direct tax collections, which include personal income tax, corporate tax and wealth tax, were originally estimated in the Budget to raise Rs6,67,000 crore.

Of the Rs6,37,000, corporate tax accounted for Rs3,92,000 crore and personal income tax Rs2,35,000 crore.

The increase in the mop-up is also due to higher wealth tax collections, which also surpassed the target.

Last year, tax authorities mopped up Rs5,58,000 crore in direct taxes, including Rs3,56,000 crore in corporate tax, Rs2,01,000 crore in income-tax and the rest in wealth tax.

There are also signs of healthy revival in corporate activity and growth in company bottomlines in the last quarter of the fiscal.

Despite the increase in tax collections, the finance minister is unlikely to realise his fiscal deficit ceiling of at 4.6 per cent of GDP in 2013-14 (See: India's fiscal deficit crosses 114% of full-year target).

On the contrary, he will be resorting to large-scale deferment of government expenditure to the first quarter of new financial year, starting 1 April.