With the preparations for Budget 07-08 gaining momentum, revenue collections are in focus. The Central Board of Direct Taxes (CBDT) has asked field formations to go the whole hog to maximise collections from the additional demand raised and recover arrears.
In a communication to all commissioners and chief commissioners, the board has advised them to make all efforts to collect the maximum amount out of current demand raised. It has asked them to direct field officers to utilise the last quarter of the financial year and to stay a demand only on conditional payment of lump-sum amount of installments or tendering of suitable security.
This year, the field formations had to complete the assessments of 2004-05 by December 31, so they can keep the last three months aside for collections. If the department succeeds in maximising collections from the additional demand, the buoyant revenue situation will be further boosted. Direct tax collections have been growing at over 40%. Gross direct tax collections as on date stand at Rs 1,83,000 crore. The 2006-07 budgetary estimate on direct tax front is Rs 2,10,419 crore. The CBDT had made an additional demand of Rs 58,000 crore in 2005-06, of which it collected Rs 16,500 crore.
With the economy on a high, the additional demand raised after carrying out scrutiny of returns is also expected to go up substantially. This additional demand will offset the outgo on account of refund claims by assessees. Usually, in March and April, revenue collections witness a negative growth due refunds. Refund claims till December stood at about Rs 27,000 crore.
The buoyancy in tax collections was seen in the collection of arrears as well. The income-tax department is expected to cross the Budget target for arrears collection, pegged at Rs 11,700 crore. The department collected Rs 9,500 crore in arrears till December 2006.