Preliminary estimates of advance tax payments for the thrid quarter (16 September to 15 December) of 2008-09 in the New Delhi and Chennai region showed aggregate tax collections had contracted as compared with the corresponding period of the previous year. Final tax data for Mumbai, the largest contributor among the 19 tax chief commissionerates, had not yet come, but income tax officials said early trends suggested this year’s collection was largely stagnant in contrast to the average growth of over 30% in the last three years. Advance tax is a proxy for companies’ profit estimate for the year as the tax is paid quarterly based on a company management’s estimate of the ongoing year’s profitability. The contraction in advance tax collections has come in the backdrop of a slowdown in economic growth in the current year.
Also See Figures (Graphics)
Graphics by Sandeep Bhatnagar / Mint