With fiscal math under pressure due to lower buoyancy in tax collection, the government is eyeing advance tax payment to meet the revised Budget target of Rs 12 lakh crore for the current fiscal.
According to sources, efforts are being made to make up for the shortfall in direct tax collection, but the revised target seems to be daunting. The government had earlier estimated Rs 11.5 lakh crore mop-up from direct tax collection.
The increase of Rs 50,000 crore in the interim Budget 2019-20 has made the task of achieving the revised target a difficult proposition for the Central Board of Direct Taxes (CBDT), sources said adding the shortfall seems to be imminent.
However, the clarity on the exact quantum of shortfall would emerge only after the final figure of advance tax collection comes, sources said.
Net direct tax collection during April-January of this fiscal stood at Rs 7.89 lakh crore against Rs 12 lakh crore targeted for the entire fiscal.
To meet the shortfall, CBDT chairman P C Mody held a meeting with senior tax officials to review collection figures ahead of the deadline of advance tax payment of Friday. Besides, the board has been issuing an advisory asking the taxpayers to pay the fourth and last installment of advance tax for the current fiscal.
Under the Income Tax Act, any assessee, including salaried employee whose estimated tax liability for an year exceeds Rs 10,000 needs to pay advance tax. With the tax department staring at the deficit in collection, there are apprehensions that corporates may have to pay more in the last installment and claim refund in the next fiscal. As a result of this, the gap between the target and actual realisation is narrowed for the current fiscal.
It is to be noted that the government has been putting on a brave face as far as meeting direct tax collection target is concerned. “On direct taxes, we are reasonably confident of (meeting the target). But on the indirect tax front, there may be some shortfall,” Economic Affairs Secretary Subhash Chandra Garg said on Thursday.