DIRECT TAX COLLECTIONS MAINTAIN GROWTH OF OVER 40 PERCENT FOR THE PERIOD 1ST APRIL TO 15TH OCTOBER 2007

Direct tax collections maintained a growth of over 40 percent for the period 1st April to 15th October 2007. Net direct tax collections stood at Rs.1,21,950 crore, up from Rs.86,751 crore during the same period last fiscal.

Corporate tax recorded a growth of 40.29 percent at Rs.75,549 crore, up from Rs.53,853 crore during the previous fiscal. Personal income tax (including FBT, STT and BCTT) grew by 41.13 percent at Rs.46,320 crore, up from Rs.32,821 crore. The growth in Securities Transaction Tax (STT) was 48.05 percent (Rs.3,784 crore as against Rs.2,556 crore) and Banking Cash Transaction Tax (BCTT) was 20.22 percent (Rs.284 crore as against Rs.236 crore). Fringe Benefit Tax (FBT) recorded a growth of 87.92 percent (Rs.2,326 crore as against Rs.1,238 crore).

Growth of over 49 percent in direct taxes deducted / collected at source is a strong indicator of increasing employment, employee compensation and private investments; while growth of about 30 percent in advance direct tax collections is indicative of better profitability and improved cash-flows in businesses - particularly in the core, consumption and financial sectors. Increase of 64 percent in self-assessment tax confirms the trend of better tax compliance.

Direct tax collection growth signals stronger compliance and improved corporate and personal tax receipts this fiscal period. Direct tax collections showed substantial expansion to 15 October 2007, with marked increases in corporate tax and personal income tax (including FBT, STT and BCTT). Notable growth in STT and FBT occurred. The press release links large growth in amounts deducted or collected at source to rising employment and investment, higher advance tax collections to better corporate profitability and cash flows, and increased self-assessment tax to improved tax compliance.