Direct Tax

Report No. 27 of 2011-12 - Compliance Audit on Direct Taxes Union Government, Department of Revenue

Date on which Report Tabled:
Tue 24 Apr, 2012
Date of sending the report to Government
Government Type
Union Department
Direct Tax
Sector Taxes and Duties


The Comptroller and Auditor General of India conducts the audit of revenues from direct taxes of the Union Government under section 16 of the Comptroller and Auditor General of India (Duties, Powers and Conditions of Service] Act, 1971.Direct taxes levied by the Parliament mainly comprise Corporation Tax on companies. Personal Income Tax and other direct taxes including Fringe Benefit Tax, Securities Transactions Tax and Wealth Tax etc, Corporation Tax constituted 66,8 per cent of net direct tax collection in 2010-11.

In the Budget 2010-11, the Government amended the provisions relating to direct taxes in order to: (i) lower the tax burden on individual taxpayers by widening the tax slabs; (ii) facilitate small businesses; (iii] promote investment in Research and Development (R&D] to enhance the competitive ability of the economy and [iv] encourage savings for funding infrastructure by providing a tax deduction on investment in long-term infrastructure bonds.

We noticed that the direct tax collection exceeded the budget estimates in all the years over the period 2006-07 to 2010-11 except 2008-09. The extent of actual collection exceeding the budget estimates ranged from 2.2 percent in 2009-10 to 16.7 percent in 2007-08.

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