Banks see a plunge in advance tax payments as NPAs bite
Bad loans have hit the banking sector's advance tax payouts for March quarter, with SBI paying a 60 percent lower tax, ICICI Bank showing a marginal increase, while HDFC Bank posting a 14 percent growth in tax liability.
Mumbai: Bad loans have hit the banking sector's advance tax payouts for March quarter, with SBI paying a 60 percent lower tax, ICICI Bank showing a marginal increase, while HDFC Bank posting a 14 percent growth in tax liability.
The State Bank of India paid an advance tax of Rs 690 crore as against Rs 1,749 crore paid in the March quarter last fiscal, sources in the I-T department told PTI here.
Its private sector rival ICICI Bank fared a tad better, paying Rs 1,300 crore as against Rs 1,295 crore in the year-ago period.
However, immunity from the NPA problems resulted in HDFC Bank's outgo rising to Rs 1,600 crore from Rs 1,400 crore year ago, they said.
The last date for payment of advance tax for March quarter ended yesterday.
The advance tax, a system of staggered payment of I-T liabilities, is generally considered a barometer of a company's performance for a particular quarter and the payments are tracked closely by the investors.
An asset quality review undertaken by the Reserve Bank last December has resulted in a spike in bad assets with lenders recognising over Rs 1 trillion of NPAs in the third quarter alone.
When it comes to the Mumbai circle, which contributes over a third of the direct tax payments, the officials exuded confidence of achieving the Rs 2.56 trillion target for the fiscal, saying Rs 1.86 trillion has already been collected.
"Things are going well and we are on target. As on date, we have already collected Rs 1.86 trillion tax, including the advance tax collection of Rs 1.01 trillion as on March 14 from top 45 corporates in Mumbai," Principal Chief Commissioner of Income Tax and Head of Mumbai region, D S Saksena told PTI here today.
"Even as the advance tax collection from both private sector and public sector banks as well was down, sectors like oil and pharma have done well on the front of advance tax payment," he said.
Life Insurance Corporation (LIC) paid an advance tax of Rs 1,647 crore for the fourth quarter, up from Rs 1,470 crore in the year-ago period, the sources said.