State beats TN in direct tax mop-up

For the second consecutive year in 2013-14,  Karnataka has outshone Tamil Nadu in direct tax collections.

On all India level the State has occupied third slot after Mumbai and New Delhi.  
 Karnataka, including Goa region, collected Rs 59,000 crore as total direct taxes in 2013-14.

This is Rs 16,500 crore more than taxes collected by the neighbouring southern State of Tamil Nadu.

In financial year 2012-13, Karnataka collected Rs 49,682 as direct taxes against Rs 37,266 crore collected by Tamil Nadu.

A Central Board of Direct Tax official said tax collection from Karnataka region was improving mainly on the back of better performance of information technology firms.

IT firms professionals are increasingly opting Karnataka to be their headquarters than Chennai because of better software development in the State.

“Besides, the number of top tax paying individuals in Bangalore is increasing,” he said, adding software development in Karnataka region can be attributed better tax management.

The official, however, said that a detailed tax collection figure in individual states was not available with CBDT yet but in direct tax segment, the government has been able to collect about Rs 5,500 crore more that the revised estimate of Rs 6,41,835 crore in 2013-14.

“Since the Centre has been able to achieve the pan India direct tax collection target, we have assumed that all states have achieved their target,” the official said. Direct taxes include personal income tax, corporate tax and wealth tax.

According to a Centre-sponsored study, Karnataka has been amongst first states to take up computerisation of the core processes to improve service delivery to citizens across government departments.

IT officials in Bangalore said Bangalore Circle, which also covers Goa, has been ahead of Chennai for last six years.

“The emergence of IT and BT sector and subsequent rise of service sector too contributed a lot to IT collection. This is despite the fact that the revenue from mining in Bellary has come down drastically,” an IT officer said.

Although Goa is part of Karnataka Circle and was supposed to contribute Rs 1,500 crore of the target set by the Centre, ban on mining activities resulted in its insignificant share to Karnataka's IT revenue.

“Despite Goa's little contribution, Karnataka alone could achieve 99.5 per cent of Rs 60,000 crore target. When mining activities in Karnataka were at the peak, IT collection was beyond 100 per cent of target,” another IT official said.