Enthused by the 8.5 per cent growth in direct tax collections at over Rs.2.50 lakh crore till December-end, Finance Minister Pranab Mukherjee on Friday directed the Income-tax Department to strive for achieving the revised revenue mop-up target of Rs.4 lakh crore during the entire fiscal year.
Addressing the All India Conference on Tax Deduction at Source (TDS) here, Mr. Mukherjee noted that for achieving the revised target, the department’s field formations would have to take certain steps.
Apart from identification of new areas for tax collection, these measures should include in-depth scrutiny of cross-border transactions; regular interactions with Central and State government authorities who are responsible for TDS and monitoring of such deductions at the district level where massive social and infrastructure spending is being incurred by the government.
Alongside, there has to be a regular sharing of information amongst the commissionerates to develop a common data base of new areas explored by each of them for collection of TDS.
Mr. Mukherjee pointed out that although the contribution of TDS to the net direct tax kitty had gone up from 33 per cent to 38.5 per cent during the last five years, its share could be stepped up further, especially when smaller towns were witnessing higher revenue collections owing to buoyancy in the economy.
The Finance Minister observed that while globalisation of the Indian economy had created opportunities in terms of a world market for movement of capital, goods, services and human resources, it had also presented greater risk in terms of sophisticated tax planning tools for avoiding tax liabilities in developing countries. In this context, the role of tax havens and low tax jurisdictions had become an area of great concern for a country like India, which needed to mobilise resources to attack poverty and illiteracy, he said.
Stressing that the economy has started moving in the right direction following the sustained fiscal stimulus provided in three phases, Mr. Mukherjee expressed confidence that a growth rate of more than 7.75 per cent was achievable during 2009-10.
