Mumbai: The initial numbers on the advance tax paid by at least 45 companies, including Reliance Industries Ltd, Housing Development and Finance Corp. Ltd (HDFC), Life Insurance Corp. of India and Mahindra and Mahindra Ltd, for the December quarter show a rise of 12.8%, signalling higher corporate profits.
HDFC, India’s largest mortgage lender, has paid Rs.560 crore as advance tax for the three months ending 31 December, up from Rs.475 crore in the year-ago period. An official at the company confirmed the figure. LIC has paid Rs.1,297 crore for the quarter under consideration up from Rs.1,166 crore in the year-ago period.
The marginal growth in advance tax numbers comes at a time when the GDP growth rates in first two quarters of the current fiscal (2012-13) have been 5.5% and 5.3%, respectively, against a 6.5% annual growth in the last fiscal.
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. The companies were scheduled to make the payment by the end of Saturday.
“The indicative numbers are close to the actual tax paid but there could be marginal difference,” said an I-T department official, who declined to be named.
The overall growth of advance tax payments is on the expected lines of 15% growth with some of the companies outperforming, he said.
The total target of tax collection for the Mumbai circle is pegged at Rs.1.78 trillion for the current fiscal while the national target is at Rs.5.75 trillion.
“As of now, the tax collections are progressing on expected lines and if the companies are paying on time, we would be able to meet the targets,” said the official.
State Bank of India (SBI), the nation’s largest lender, is the only entity on the list of 11 companies that paid marginally less than what it had paid a year ago. SBI paid Rs.1,701 crore for the December quarter, marginally down from Rs.1,730 crore in the corresponding quarter of last year. Majority of the Tata Group companies paid comparitevely less tax in this December quarter barring Tata Consultancy Services Ltd.
Reliance Industries Ltd paid Rs.1,100 crore (Rs.1,000 crore last year); Bajaj Auto Ltd, Rs.470 crore (Rs.450 crore last year); and TCS, Rs.620 crore (Rs.530 crore last year).
Tata Motors Ltd did not pay advance tax at all while it paid Rs.60 crore in the December quarter of the last fiscal. Tata Steel Ltd paid Rs.520 crore for the reporting quarter down from Rs.1,090 crore in the year-ago period.
Traditionally, SBI has been the highest advance taxpayer in the Mumbai area, followed by RIL.
According to senior I-T officials, Bank of India paid Rs.125 crore for the 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); M&M, 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).
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.
According to the finance ministry websire, the gross collection of corporate taxes showed an increase of 3% at Rs.2,05,301 crore for April-November of the current fiscal as against Rs.1,99,317 crore during the same period last year.