Direct Tax Collection – the boom continues;
And refund without TDS verification – Cost of collection – 0.54 percent
Net direct tax collections in the first two months of the present fiscal stood at Rs.22 ,840 crore , up from Rs.13,335 crore , registering a growth of 71.28 percent.
The robust growth in direct taxes has been achieved despite larger refund payouts at Rs.9,014 crore in the first two months of this fiscal as against Rs.5,037 crore during the first two months of last fiscal. In spite of manpower shortage, refunds were issued to over 48 lakh taxpayers last fiscal (2007-08) compared to about 44.5 lakh refunds in the previous fiscal (2006-07). It is the endeavour of the Income Tax department to provide better taxpayer services, particularly in the area of issuance of refunds. Therefore, the criteria for issuance of refunds to taxpayers without verification of TDS instruments has been further relaxed to gross TDS claims of up to Rs.5 lakh and net refund claim of Rs.25,000 per taxpayer. Under the relaxed criteria, about 92 percent of the refund claims for fiscal 2007-08 will be settled without asking the taxpayers to produce the TDS certificates / challans in cases of mismatch.
Direct tax collections have been witnessing high growth due to better tax compliance by the taxpayers and an improved tax administration.
The cost of collection, on the other hand, declined to an all-time low of 0.54 percent during 2007-08, among the lowest in the world.