TCS & RIL top the charts in the advance Tax figures

16 Mar 2010

If advance tax data is any indicator of corporate profits, then the fourth quarter may be a mixed one for India Inc. Only a few companies, such as Reliance Industries (RIL), Infosys, TCS and Tata Motors, have posted substantially higher payments compared with the same quarter last fiscal.

 

The mop-up, thus, throws up a key question: will the tax department meet the stiff collection targets set by the finance ministry. According to sources in the income tax department, advance tax collections from the top 100 tax-payers have shown a growth of just over 19% year on year compared with the internal target of close to 25%.

 

The government had revised estimate for direct tax collections in 2009-10 (April-March) to Rs 387,000 crore, while the actual collection may remain between Rs 370,000 crore -Rs 375,000 crore, according to early indications.

 

Meantime, RIL’s advance tax payment almost doubled to Rs 770 crores, sources at software majors Infosys and TCS said their robust advance tax numbers reflected growing business confidence and higher profitability in coming quarters. Tata Consultancy Services (TCS) paid Rs 178 crore, from Rs 53 crore earlier. Cement maker ACC paid Rs 330 crore, from Rs 340 crore a year ago. Hindalco paid Rs 85 crore, versus Rs 70 crore a year ago.

 

But the banking sector, which has unfailingly led the advance tax chart for the last many quarters, has disappointed this time round. State-run Union Bank of India paid Rs 185 crore, from Rs 253 crore a year ago. Yes Bank paid Rs 108 crore, versus Rs 41 crore a year back. Bank of India paid Rs 100 crore, versus Rs 590 crore a year ago.

 

In the case of foreign banks, advance tax payments were 50-60% lower than the previous figures.

The cement sector posted marginally better numbers, while housing finance leader HDFC’s payment remains unchanged.

If there was a comeback kid of the year award, it would certainly go to Tata Motors, which paid Rs 115 crore this quarter as against no payment last year. Corporates have to pay 25% of their annual estimated tax liability in advance in January-March. In April-September, they pay 15% of estimated tax burden for the year as advance tax, while in July-September and October-December they pay 30% each.

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