The advance tax collection of the country declined over 22 per cent for the third quarter of the current financial year. Tax collection was Rs 54,900 crore in the same period last year and it now stands at Rs 42,600 crore. The decline in the advance tax collection indicates the grim situation following the economic slowdown which may further worsen in the coming times. Now, the growth rate in direct tax collections for the first nine months stands at 12%. Government has set a target to achieve the tax growth rate of 15 per cent with net tax collection of Rs 3,65,000 crore for the current financial year.

Meanwhile, direct tax collection had declined by 36.09% to Rs 10,346 crore in November 2008. The combined effect of the direct tax and advance tax reduction has declined the cumulative growth rate to 11 per cent for April-December period as compared to 22% in April-November, 2008.

Advance tax is paid by the corporate and non-corporate houses in four installments on the basis of their estimated income for the financial year. It is paid in March June, September and December each year.

Experts believe that it is difficult to achieve the Central Board of Direct Taxes' internal target of Rs 3,95,000 crore under the prevailing circumstances.