Mumbai: The initial numbers on the advance tax likely to be paid by at least 11 companies, including Reliance Industries Ltd, Housing Development and Finance Corp. Ltd (HDFC) and Mahindra and Mahindra Ltd, for the December quarter show a rise of 8.3%, signalling higher corporate profits.
HDFC, India’s largest mortgage lender, has paid Rs.560 crore as advance tax for the three months, up from Rs.475 crore in the year-ago quarter. An official at the company confirmed the figure.
Advance tax figures for the other companies were sourced from the income-tax department.
Typically, companies indicate the sum to the department on the phone before actually making the payment. They will pay on Saturday.
“The indicative numbers are close to the actual tax paid but there could be marginal difference,” said an income-tax department official, who declined to be named.
State Bank of India (SBI), the nation’s largest lender, is the only entity on the list of 11 which is likely to pay marginally less than what it had paid a year ago. SBI is likely to pay Rs.1,700 crore for the quarter ending 31 December, against Rs.1,730 crore in the corresponding quarter of last year.
Reliance Industries is likely to pay Rs.1,100 crore (Rs.1,000 crore last year); Bajaj Auto Ltd Rs.510 crore (Rs.450 crore last year) and Tata Consultancy Services Ltd (TCS) Rs.620 crore (Rs.530 crore last year).
Traditionally, SBI has been the highest advance taxpayer in the Mumbai area, followed by RIL.
According to senior income-tax officials, Bank of India is paying Rs.125 crore for the December quarter (against Rs.100 crore last year), Central Bank of India Rs.120 crore (Rs.104 crore last year), Bank of Baroda Rs.550 crore (Rs.525 crore last year), Mahindra and Mahindra Rs.295 crore (Rs.207 crore last year), LIC Housing Finance Co. Ltd Rs.113 crore (Rs.91 crore last year) and Larsen and Toubro Ltd Rs.330 crore (Rs.350 crore last year).
“These are initial numbers. We will have clarity on Saturday,” the income-tax official said.
Mumbai-based companies account for one-third of the corporate tax paid by Indian companies.
In keeping with the norms laid down by the Income Tax Act, companies are required to pay 15% of their total advance tax in the first quarter, followed by 30%, 30% and 25% in the next three quarters, respectively.
Most analysts expect the Reserve Bank of India to cut its policy rate in its January monetary policy review.
Lower borrowing costs would help revive the growth momentum in Asia’s third largest economy, which grew 5.3% in the September quarter, in turn giving a boost to corporate earnings.