With tax collections being buoyant due to the economic growth, the finance minister has asked revenue officials to raise their targets for the first time in history, reports NDTV.
Collection targets for corporation and income tax have been raised upwards from major tax zones, Mumbai, Delhi, Bangalore, Chennai, Hyderabad and Kolkata for the January-March 2006-07 quarter.
The actual STT collections are expected to be Rs4,500 crore or 28 per cent higher than the earlier estimate. The targeted of Rs210,419 crore in direct taxes for the current financial is now higher by five to seven per cent.
Even under the original target, the collections were expected to exceed targets by Rs10,000 crore, with collections growing at over 40 per cent as compared to budget target of 28 per cent.
This is also likely to raise demands to prune income tax rates. However, what does this mean for the ordinary taxpayers. Though the finance minister can afford to cut tax rates now, but will he?
Probably not because he would like to give away tax cuts next year….the last budget before elections in early 2009, says NDTV.
The channel says, this time the minister may tinker with the 10 per cent surcharge for all taxpayers, which is expected to yield over Rs16,000 crore in tax revenue or cut the dividend distribution tax for corporates and, on the flip side, cut some tax exemptions.