Amid fears of slow economic growth, India Inc paid more advance tax in the first quarter of the current financial year from a year ago, signalling any erosion in earnings of top companies is still a few quarters away.
Advance tax collection from the top 100 companies in the Mumbai region expanded nearly 14 per cent year-on-year. The rise in collection was the highest this quarter when compared to the same period of the previous two financial years.
The tax department has set a target of 18 per cent growth in advance tax mop-up for the current financial year ending March 2012.
| ADVANCE TAX PAYMENTS OF NIFTY COMPANIES | ||
| NIFTY Companies | Q1FY12 (in Rs crore) | Q1FY11 (in Rs crore) |
| State Bank of India | 1,100 | 850 |
| ONGC | 1,060 | 1,090 |
| Reliance Industries | 900 | 653 |
| Bharat Heavy Electricals | 520 | 430 |
| HDFC Bank | 400 | 315 |
| Punjab National Bank | 400 | 320 |
| Source: Agencies | ||
“Considering the first quarter, April-June collections are quite satisfactory...I am very optimistic that we will meet the target,” P P Srivastava, chief commissioner of income tax (Mumbai region), told a news agency here on Wednesday.
The increase in collections would be good news for the government, as it is battling to meet the revenue growth target. Finance Minister Pranab Mukherjee had last week said that meeting the target would be a tough task.
The financial services sector led the race with the country’s largest commercial bank State Bank of India (SBI) paying Rs 1,100 crore in April-June from Rs 850 crore it paid a year earlier.
Advance tax payment of top private sector banks like ICICI Bank and HDFC Bank also increased by 27 per cent and 11 per cent, respectively. While ICICI Bank paid Rs 390 crore, HDFC Bank shelled out Rs 350 crore.
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Among foreign lenders Citibank’s advance tax payment surged 50 per cent year-on-year to Rs 150 crore. Hong Kong and Shanghai Banking Corporation (HSBC) paid more Rs 250 crore tax compared with Rs 225 crore it paid last year.
Life Insurance Corporation of India’s (LIC) first installment of advance tax payment was 9 per cent higher than a year ago at Rs 580 crore.
Reliance Industries (RIL), India’s most expensive company by market capitalisation, paid Rs 900 crore advance tax in April-June. It had paid Rs 650 crore advance tax in the corresponding period last year.
Among state-run lenders Bank of India (Rs 165 crore), Bank of Baroda (Rs 250 crore) and Dena Bank (Rs 55 crore) also paid higher tax year-on-year.
The country’s largest mortgage lender Housing Development Finance Corporation’s (HDFC) tax bill rose by Rs 35 crore to Rs 250 crore.
Among automobile makers, most companies other than Tata Motors paid higher advance tax. Tata Motors paid Rs 62 crore compared with Rs 65 crore. Advance tax outgo of Bajaj Auto was Rs 125 crore, while for Mahindra & Mahindra it was up nearly 50 per cent at Rs 90 crore.
For Tata Steel advance tax payment was lower at Rs 280 crore from Rs 300 crore, while its group company Tata Chemicals also paid less tax of Rs 27 crore compared with Rs 29 crore payment a year ago.