According to the Income-Tax Act, companies are required to pay 15 per cent of their total advance tax in the first quarter, followed by 30 per cent, 30 per cent and 25 per cent in the next three quarters, respectively.
The income tax (I-T) department is expecting corporate advance tax collections from India’s top 100 companies for the first quarter of fiscal 2016 to be flat from a year ago, according to two IT officials who did not want to be named.On Monday, advance tax payments of the top nine companies registered in Mumbai for the three months ending 30 June showed a 13.01 percent increase from a year earlier. But that doesn’t raise any hopes for overall numbers, said officials. “We are mostly expecting this quarter’s tax collection to be flat. However, this is just the first quarter of the financial year and a clear trend will emerge only after the second quarter advance tax numbers,” said a senior I-T official.Companies in India pay advance tax a fortnight before the end of every quarter on their projected earnings and these numbers are sometimes used as a proxy for their financial performance and the state of the corporate sector and economy. This estimate of a flat advance tax growth comes at a time when rating agencies such as Crisil have cut their GDP estimates for this quarter by 50 basis points. Even the RBI has cut its GDP growth estimate for this fiscal to 7.6 per cent, down 20 basis points from earlier forecasts with a “downward bias.”
According to the Income-Tax Act, companies are required to pay 15 per cent of their total advance tax in the first quarter, followed by 30 per cent, 30 per cent and 25 per cent in the next three quarters, respectively. Mumbai accounts for about 34 per cent of the total direct tax collections in the country. The government has set a total direct tax target of Rs 7.98 trillion for FY 16.
Among banks, State Bank of India (SBI) is likely to have paid Rs.1,290 crore, up 4 per cent from a year ago as advance tax. Traditionally, SBI, the nation’s largest lender, has been the highest taxpayer in the Mumbai area, followed by Reliance Industries Ltd (RIL).
HDFC Bank Ltd is likely to have paid Rs 1,000 crore against Rs 820 crore, up 21.9 per cent for the corresponding quarter a year ago, while Bank of India is likely to have paid Rs 240 crore against Rs 125 crore, up 92 percent.
Bharat Petroluem Corp Ltd (BPCL) is likely to have paid Rs 187 crore against Rs 197 crore, while HDFC Ltd has paid Rs 465 crore against Rs 415 crore—up 12.05 per cent.