India Inc's advance tax payout rises over 15% Read more: In

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Old 18-Dec-2010
Ginni Singh
India Inc's advance tax payout rises over 15% Read more: In

MUMBAI: With consumption on the rise, Corporate India has paid 15-20 % higher tax for the third quarter of the current financial year.

Top private sector players such as Reliance Industries, the Tata group companies and the AV Birla group saw a sharp surge in the third installment of advance tax payment for which the deadline was Wednesday. Some public sector lenders such as State Bank of India and Punjab National Bank, foreign banks and stateowned oil companies seemed to be the only laggards, according to initial estimates available with the Mumbai zone of the income tax department. This region accounts for over half the corporation tax collected by the government.

Within the list, data for some of the major taxpayers such as ONGC and Deposit Insurance & Credit Guarantee Corporation was unavailable and the final numbers will only be available towards the end of the week.

But the numbers—which are often used as an advance indicator to gauge economic growth—point to the growth momentum being sustained. For April-November , direct tax collections—which includes personal income tax, corporation tax and securities transaction tax – went up by 17.85% to Rs 2.17 lakh crore, which is over half the budget target for the year. Overall tax collections are also buoyant as indirect tax collections rose by 42.3% to Rs 2.08 lakh crore during April-November , the latest data released on Wednesday showed.

Among the companies, Mukesh Ambani-controlled Reliance Industries saw a near 43% increase in the third installment of advance tax to around Rs 1,200 crore. The increase was on account of better refining margins during this quarter, analysts said.

The state-owned oil companies , however, seem to be burdened by the impact of underrecovery due to their inability to raise retail prices of cooking and auto fuel in line with global crude petroleum price movement. As a result, Indian Oil, the largest oil market company , saw its payout fall by over 70% from around Rs 350 crore to around Rs 100 crore. Bharat Petroleum was at the other extreme and did not pay any advance tax.

For the Tata Group, the turnaround seems to have been complete with Tata Steel (54% rise to around Rs 1,000 crore), Tata Motors (120% to Rs 220 crore), TCS (30% to Rs 230 crore), and consequently, Tata Sons (100% rise to Rs 40 crore) seeing a sharp surge in their advance tax payment.

Most of the banking sector too seemed to have fared well, but cement manufacturers such as ACC and Ambuja Cements paid lower taxes in the third installment. The rise in bond yields, which results in a lower value for the securities portfolio, has resulted in LIC's advance tax payment rising at just a shade over 9%.

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