Tier-II & III cities new gold mines for I-T dept

To boost sales, India Inc is shifting focus from saturated metropolitan markets to new and emerging cities. And the taxman, who does not want to lose out on any direct tax collections, is following suit, reports Ashmit Kumar of CNBC-TV18.

Where there's growth, the taxman is sure to follow. Tier-II and tier-III cities. These cities have fuelled growth for Indian Inc in past year. And also become star performers for the income tax (I-T) department.
Tax collections from nine tier-II cities from Ahmedabad to Pune to Kochi to Chandigarh to Jaipur have shown growth between 20-30% in FY12. Even Lucknow and Patna have not failed to impress; Guwahati has surprised all with a 25% surge in direct tax mop up.
That's a sharp contrast to the bigger cities. Kolkata, with 8% growth in tax collections, has been the leader followed by 5% in Delhi and 3% in Mumbai. Bringing the all-India tax growth rate down to 10%.
What's behind this surge in tier-II cities? Simple. These smaller cities offer potential for widening the tax base, and taxing of unchecked revenue streams.
The taxman now wants to better the high tax collection rate from these secondary cities and plan to deploy innovative tax collection strategies aimed at increasing the overall tax contribution from these cities higher than the current 30%.
Also watch the accompanying video.