Centre summons I-T chiefs

12/11/08, Business Standard

 

Concerned over the decline in direct tax collection growth, Revenue Secretary PV Bhide has called a meeting of chief commissioners of income tax tomorrow. The meeting is expected to evolve an action plan to boost direct tax collections in the remaining five months of the fiscal year ending March 2009.

 

The revenue department is worried that the growth in direct tax collections may slip unless efforts are made at this juncture. The growth slowed to 29.5 per cent in the seven-month period between April and October, as against 43 per cent in the same period a year ago.

 

This was mainly on account of a slowdown in advance tax collections. The decline became evident up to September, when the growth came down to less than 33 per cent, as against 40 per cent in the same period last year.

The chief commissioners, who exercise jurisdiction over at least one state, have been asked to come prepared with action plans to meet the Budget targets. Area-wise progress in assessment work will also be reviewed at the meeting.

 

The chief commissioners are also likely to be told to monitor advance tax payments by top 100 companies in their zones and try and ensure that the payments are in line with the companies’ expected profitability.

 

The moderation in advance tax collection growth is due to a number of factors, including the impact on profitability of companies due to economic slowdown and companies deferring advance tax payments to tide over the current tight liquidity conditions.

 

The advance tax collection growth declined to 13 per cent in the first seven months from around 30 per cent in the same period last year. Officials say advance tax payments are likely to slow down further in the December quarter due to the ongoing financial crisis.

 

Tax collections need to grow at an annual rate of 16 per cent to achieve the Budget target of Rs 3,65,000 crore for 2008-09.

 

CCITs may be asked to focus on the following:

* Companies paying less advance tax may be asked to pay more

* Complete time-barred assessments and raise tax demands

* More TDS surveys and verifications to enforce compliance

* Collect more arrears

 

(Read my comment on the story below… in comments section)

One thought on “Centre summons I-T chiefs

  1. Till last year the Tax collections were upbeat due to booming world economy. This year the scenario is totally different as many people would be missing the income levels which they saw last year. The story clearly states that centre is worried as in this election season they can’t afford to show bigger deficit. Tax collection is a major source to fill this deficit hole.

    We all know that when targets are set in companies the executives resort to all means to achieve them same would be the case with IT officials.

    Here comes the significance of Tax Planning. Unless and otherwise your papers are in order there are all chances that u fall into the Tax trap. Smallest loophole can bring in a liability. There is time till Mar’09 by which you must be fully prepared.

    Rgds

    Vivek Karwa
    Certified Financial Planner
    Chennai

    Like

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