Advance tax up marginally by 7.5%; reflects impact of slowdown
New Delhi: Advance tax collection registered a marginal increase of 7.5 percent in the third quarter to Rs 78,000 crore, reflecting the impact of slowing economy.
"The overall advance tax collection (both companies and non-companies) for the December quarter amounted to Rs 78,000 crore. Advance corporate tax collection have shown 7 percent growth year-on-year, while advance tax collections from individuals and firms have shown 12 percent growth during the period," a senior finance ministry official said.
Advance tax collection for the December quarter by both companies and non-companies last year was Rs 70,000 crore.
The rise is advance tax collection at 7.5 percent during the quarter was lower than the annual increase of 15 percent in direct taxes that is envisaged for the current fiscal in the budget.
Advance tax payment is a reflection of performance of the economy and lower collection suggests lower profitability. The economic growth rate in the first half of the current fiscal was 5.4 percent as against 7.3 percent in the same period of previous fiscal.
Companies pay advance taxes in four instalments. In the current quarter, they have to pay 30 percent of their annual tax liability.
The collection chart is led by the largest financial institution LIC which has paid 10 percent more at Rs 1,297 crore in advance tax payout for the third quarter compared to Rs 1,166 crore in the same period a year ago.
On the other hand, the largest lender State Bank of India has paid marginally lower advance tax in the third quarter at Rs 1,701 crore as against Rs 1,730 crore in the same period last year.
Similarly, housing lender HDFC had said it has paid Rs 560 crore in advance tax against Rs 475 crore in the review period, a growth of 18 percent.
Software major TCS has also seen a major spike in its tax outgo at Rs 810 crore compared to Rs 530 crore, which is a growth of over 50 percent, while Tech Mahindra has paid Rs 60 crore, which is the same amount it had paid in the year-ago period.
Bank of Baroda paid Rs 550 crore compared to Rs 525 crore last quarter while Central Bank of India paid Rs 120 crore against Rs 104 crore in the year ago period.
However, the largest steel maker Tata Steel has seen its outgo decline by more than half to Rs 529 crore as against Rs 1,090 crore.
Among the auto sector, Bajaj Auto has paid Rs 470 crore compared to Rs 450 crore, while Tata Motors has not paid any amount this time around against Rs 60 crore it had paid in the Sept-Dec quarter of last fiscal.
Finance Minister P Chidambaram had earlier said that I-T Department will adopt a non-adversarial approach in realising the direct tax target of Rs 5.70 lakh crore for 2012-13.