The last installment of the advance tax paid on Friday failed to cheer up the income tax (I-T) authorities, who believe that the city may fall short of around Rs. 10,000 crore in meeting the direct tax target by month-end.
The last installment of the advance tax gives a fair idea on the final tax collection that could be made by the end of March. Advance tax is collected in four installments in a financial year.
Mumbai needs to collect Rs. 1.74 lakh crore in direct taxes. Of this, before the last installment of advance tax, the city had collected Rs. 1.33 lakh crore. “With the last installment of advance tax that was paid on Friday and tax coming through regular assessment and TDS (tax deducted at source) in the next few days, we expect to get somewhere around Rs. 30,000 crore. This means we would fall short of around Rs. 10,000 crore,” said a senior I-T official requesting anonymity.
Explaining the reason, he said, “The advance tax shows that 140 of the top 200 companies recorded a growth of only 7.4 per cent. This is a major cause for concern.”
Officials say that they are hoping to cross last year’s collection of Rs. 1.6 lakh crore. “Falling short of the mark would lead to various concerns,” the official said.
The initial target for the financial year was Rs. 1.78 lakh crore, which was brought down by Rs. 4,000 crore taking the slow economy into account. The department expects maximum collection from corporates, which they had pegged at Rs. 1.26 lakh crore. After them, the major contributor is the personal income tax from which the department expects to collect Rs. 46,000 crore. Besides this, the department also earns from securities transaction tax and wealth tax.
“However, in all the sections the tax collection is not up to mark,” the official said.