Note ban bites income tax dept, Q4 advance tax mop-up falls 10%

Deptt had collected Rs 1.01 lakh cr in advance taxes from the city in March quarter of previous FY

It seems that the note ban has badly hit advance tax collection from the megapolis that contributes one-third of the total corporate tax collection with the income tax department on Wednesday saying mop-up fell 10 per cent on a year-on-year basis for the fourth quarter.

The department had collected Rs 1.01 lakh crore in advance taxes from the city in the March quarter of previous financial year.

"Overall advance tax collection from the Mumbai zone fell by 10 per cent over the same period last year," an income tax official said while refusing to share details.

The official also refused to quantify the number and also refused to link the overall fall in mop-up to the demonetisation shock.
 
Incidentally, none of the large corporates, which used to share their tax payouts earlier, also shared their numbers this time around. The overall lower payout could be attributed to the lingering impact of the note ban in the quarter.

Corporates and individuals stagger their tax payouts in four quarters — on the 15th of the last month of every quarter.

While in the first quarter they pay 15 per cent of their projected annual tax liability, in the second and third quarters they pay up 25 per cent each and the rest 35 per cent in the March quarter.