FM hopeful of achieving Rs 4 lakh-cr direct tax mop-up target

As the economy revives, the government today expressed confidence that revised direct tax collection target of Rs 4 lakh crore for this fiscal would be met.

The government had earlier set the direct tax collection target for 2009-10 at Rs 3.7 lakh crore.

"The Income Tax Department would leave no stone unturned in achieving the challenging revised target of Rs 4 lakh crore," Finance Minister Pranab Mukherjee said at a conference here today.

Smaller towns, he said, are reporting greater tax collection due to the buoyancy in the economy and on account of inclusive growth.

Till December, the direct tax collection stood at Rs 2.50 lakh crore, an 8.5 per cent growth over the corresponding period last year.

However, indirect tax collections shrunk by over 21 per cent to Rs 1.26 lakh crore in the first seven months of this fiscal, against Rs 1.61 lakh crore a year ago as the government had cut excise duty by 6 per cent and service tax by 2 per cent to spur the economy impacted by global financial turmoil.

To meet the target, the Finance Ministry has asked the I-T Department to take steps like identifying new areas of tax collection, replacing scrutiny of cross-border transactions and regular interactions with the Centre and states who are responsible for tax deduction at source.

He also expressed confidence the growth rate of 7.75 per cent is achievable is the current fiscal, supported by the three stimulus packages.

The economy has stunned everybody by clocking 7.9 per cent growth in second quarter, fuelling hopes that growth would be over 7 per cent this fiscal.