Collection may be Rs 45,000 cr to Rs 50,000 cr in Q3 this year.
Advance tax paid by top 100 tax-paying firms has dipped 21 per cent in the third quarter of the current fiscal (2008-09) compared with the same period last year, indicating a subdued corporate performance due to economic slowdown.
The top 100 firms paid Rs 19,500 crore advance tax in December this year as compared with Rs 24,600 crore in the year-ago period. Overall advance tax collection may dip by over 20 per cent in the third quarter.
Though official data have not been finalised yet, leads indicate that advance tax collection may be between Rs 45,000 crore and Rs 50,000 crore as against Rs 60,000 crore in the same period last year.
Firms are required to pay three-fourths of their annual tax liabilities in three instalments — by June 15, September 15 and December 15 — depending on annual profit projections. Individuals pay in three instalments — by September 15, December 15 and March 15.
A decline in advance income tax collection will have an adverse impact on the government’s finances as it contributes nearly 45 per cent to the annual direct tax collection. The rest comes from tax deducted at source, self-assessment tax (where tax-payers themselves determine their taxable income and pay tax accordingly) and tax demands raised by the department.
The decline in advance tax paid is led by ONGC, the country’s largest oil producer, which paid 38 per cent less at Rs 1,733 crore in the third quarter, compared with Rs 2,802 crore in the same period last year.
| TOP ADVANCE TAX PAYERS IN Q3 (In Rs Crore) | |||
| Company | Dec ‘07 | Dec ‘08 | Growth/Decline (%) |
| ONGC | 2802 | 1733 | -38 |
| State Bank of India | 1088 | 1700 | 56 |
| SAIL | 1130 | 750 | -33 |
| LIC | 874 | 871 | -0.36 |
| Tata Steel | 750 | 250 | -66.67 |
| BHEL | 480 | 640 | 33 |
| NMDC | 500 | 350 | -30 |
| ICICI Bank | 500 | 625 | 25 |
| Reliance Industries | 1045 | 450 | -57 |
| NTPC | 594 | 642 | 8 |
Collection from all sectors except Indian banks has been hit. State Bank of India, the country’s largest commercial bank, was the second highest advance-tax payer at Rs 1,700 crore, an increase of 56 per cent over the year-ago period. Indian banks managed to do well due to higher demand for credit even at a higher rate of interest due to the liquidity squeeze.
Other large firms which paid significantly lower advance tax include GAIL (-12 per cent), Citibank (-40 per cent), Deutche Bank (-21 per cent), Ambuja Cement (-24 per cent), Maruti (-46 per cent), Bajaj Auto (-40 per cent), Hero Honda (-16 per cent) and Hindalco (-80 per cent).
