India's commercial capital is expecting a surge in advance tax payments for the first quarter of this fiscal, with the collections from tax deduction at source (TDS) registering an 18% jump so far compared with the previous year.

Mumbai accounts for over 40% of the countrys total tax collections, and the jump, mainly on account of a concerted mop-up drive by the income-tax department, has brightened the prospects of a better fiscal 2009 for the tax department.

In the last fiscal, TDS collections mainly from salaries, contract payments and tax deducted by Indian firms on payments to overseas entities had made up almost a third of Mumbais direct tax kitty. According to IT officials, TDS collections from Mumbai in the April 1-June 9 period stood at Rs 11,900 crore, against Rs 10,098 crore for the same period in the previous fiscal. They consider this as indicative of a better first quarter show compared to the last fiscal. A clearer picture will emerge after June 15, which is the last date for payment of the first installment of advance tax.

Typically, this installment constitutes around 15% of the years total advance tax collection. For the Mumbai region, the last fiscal brought in Rs 39,000 crore by way of TDS; this was 27% higher than the fiscal 2008. Total tax collection for the fiscal 2009 stood at approximately Rs 1.18 lakh crore, lesser than the target of Rs 1.50 lakh crore.

The first two months of the 2009 fiscal saw an unprecedented 70% growth in collection, which prompted the finance ministry to revise its all-India direct tax collection target to Rs 3.95 lakh crore from Rs 3.65 lakh crore. However, collections dropped sharply from September before eventually ending the fiscal at Rs 3.4 lakh crore.