Direct tax collection in the country is likely to see a substantial increase after the proposed Direct Taxes Code and Goods and Service Tax regimes come into force, a top government official said on Saturday.
"We are moving towards a scenario where I think there will be a substantial increase in collection of taxes. The Direct Tax Code (DTC) and Goods and Service Tax (GST) will soon be put in place. The GST will help us in direct tax collection," Central Board of Direct Taxes (CBDT) chairman SSN Moorthy said in Mumbai.
Once the GST is in place, all transactions would become transparent, Moorthy said. He was speaking at a seminar on Tax Deduction at Source (TDS), organised by the Indian Merchants' Chamber in Mumbai on Saturday.
The direct tax collection for the June quarter was Rs 68,675 crore, and according to estimations, it will rake in a total revenue of Rs 4.30 lakh crore during this fiscal.
The direct tax collection for 2009-10 was Rs 3.80 lakh crore.
However, Moorthy did not address issues such as recent changes in the draft DTC, such as payment of minimum alternate tax against book profits instead of gross assets and non-taxation of schemes such as provident fund, which may cause a loss of revenue for the exchequer.
The CBDT chairman said that the debt crisis in the Eurozone was unlikely to affect the domestic economy or impact tax collection.
"The symptoms are very good... as reported, the indirect tax collection has gone up by 40 per cent, which shows that industry has picked up. I don't think Portugal or Greece will leave any shadow on us," Moorthy said.
The CBDT chairman exuded confidence that the government would be able to achieve the direct tax target of Rs 4.30 lakh crore for this fiscal.
"The target is quite stiff. We have to collect about Rs 4,30,000 crore after surrendering about Rs 26,000 crore in the form of process streamlining and reduction in TDS rates in the last budget," he said.