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Q2 advance tax collections point to robust recovery

Anindita Dey  |  Mumbai 

Advance tax collections for the second quarter of the current financial year (2009-10) have shown robust growth of 35 to 40 per cent across industries, reinforcing the government’s hopes of a sooner-than-expected recovery.

Although total tax collections are yet to be officially collated, Mumbai’s large tax payer unit has collected Rs 2,628 crore in the second quarter against Rs 895 crore in the last quarter.

The second quarter is significant, since companies or banks pay almost 45 per cent of the total annual tax payable. The first quarter accounts for 15 per cent.

“Second quarter collections give a rough indication to the Central Board of Direct Taxes whether or not the tax departments will be able to meet the annual target for the financial year, which is definitely good for this year,” said an official source.
 

ADVANCE SIGNALS
Second installment of advance tax (paid on Sept 15)
Company 2008 2009 % Change
SBI 1500 1838 22.53
RIL 683 1157 69.40
Tata Steel 1000 400 -60.00
DICGC 773 850 9.96
ICICI Bank 575 501 -12.87
HDFC Bank 315 425 34.92
TCS 81 220 171.60
Ambuja Cements 175 150 -14.00
Bank of Baroda 255 412 61.57
BPCL 0 312

NA

Union Bank 108 207 92.00
L&T 150 210 40.00
Bank of India 90 269 198.89
Asian Paints 50 85 70.00
Tata Motors 60 130 116.67
Ultratech 41 125 204.88
M&M 17.5 112 540.00
Central Bank of India 91 79 -13.19
IDBI Bank 20 62 210.00
Tata Power 14 75 435.71
Lupin 17 50 195.00
Tata Chem 61 60 -1.64
Dena Bank 30 45 50.00
Idea 27 32 18.52
Bajaj Auto 90 170 89.00
Videocon Industries 25 30 20.00
Lubrizol India 10 20 100.00
Sterlite Tech 6 20 233.33
Indian Hotels 50 0 NA
Figures in Rs crore

The target for direct tax collections for 2009-10 has been fixed at Rs 3,70,000 crore, roughly 10 per cent higher than Rs 3,38,212 crore last year.

Most industries, especially automobile and infrastructure companies like Tata Motors, L&T and Reliance Industries, have done well.

The income-tax department, however, thinks even if all the banks have reported a quarter-on-quarter growth, their total tax payout has fallen if the advances are compared with the first quarter.

For instance, India’s largest bank, State Bank of India, saw second quarter advance taxes at Rs 1,838 crore, 78 per cent more than Rs 1,068 crore paid in the first quarter  If total tax payment projections are calculated on the basis of the first quarter payout, which is typically 15 per cent of the annual pay-out, annual tax works out to Rs 7,120 crore (that is, Rs 1,068 crore/0.15).

Add in second quarter collections, which comes to Rs 2,906 crore, and the annual payout falls more than Rs 600 crore. Assuming the second quarter accounts for 45 per cent of annual tax collections, the pay-out for 2009-10 works out to Rs 6,457 crore (that is, Rs 2,906/0.45).

Similar calculations for other banks show the same result.

First Published: Wed, September 16 2009. 00:48 IST
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