Government’s revised target of direct tax collection is likely to be missed with the Income Tax Department so far collecting Rs 6,85,972 crore during the year gone by against the projected target of Rs 7,05,000 crore for fiscal 2015, creating a shortfall of Rs 19,028 crore as per the data internally released by the Department on April 4.
The department revised the direct tax collection to Rs 7,05,000 crore for the fiscal 2014-15 against the initial projection of Rs 7,36,000 crore in view of the sluggish economic growth. While, new gross domestic product or GDP series has projected that the economy would grow 7.4 per cent in 2014-15, up from 6.9 per cent from a year ago it does not quite match up with other high frequency indicators.
Mumbai, which accounts for one-third of the nation’s total tax collections, is likely to report a lower collection than its target of Rs 2.30 lakh crore for FY15. Though, Delhi and Bangalore zones have been able to meet the targets. New Delhi alone has collected Rs. 1,02,083 crore in tax, up from Rs. 86,619 crore in the previous fiscal. Many large corporations paid higher advance tax this fiscal, especially in the fourth quarter.
Though, the Income Tax Department is hopeful of meeting the target once figures from across the country come, but even if tax collection indeed falls short of the revised target, it won’t be a new trend. For several years now, the revenue department has often been over optimistic on tax collections.