Corporate advance tax payout up 19% for June 15 instalment

Corporate India's advance tax payout for the June 15 instalment has seen a healthy 19 per cent rise despite apprehensions of wafer-thin margins caused by higher input costs and escalating interest rates.

Although there is no direct correlation between tax paid and corporate earnings, the robustness in advance tax payments are a pointer to expectations of strong financial performance for the entire financial year.

India Inc's advance tax payments for the June 15 instalment last year, too, recorded 19 per cent growth. That the tempo has been maintained this year even on a higher base of the past year only shows that growth is good, said a revenue department official.

For the June 15 instalment, advance tax payments stood at Rs 31,262 crore, registering a 19 per cent increase over Rs 26,293 crore collected for the same instalment last financial year, according to the latest data available with the revenue department.

The Central Board of Direct Taxes expects 25 per cent growth in corporate advance-tax collections when the numbers are finalised in few days, said its Chairman, Mr Prakash Chandra.

“The 20 per cent-plus growth that we see in corporate advance tax is reasonably good growth. Our overall gross tax collections till date this quarter has increased 24 per cent. The TDS (tax deduction at source) growth this year is also higher at 27 per cent, from 20 per cent level last year,” Mr Chandra said.

The overall TDS growth this fiscal has been bolstered by a strong performance of corporate TDS, which grew 31 per cent (negative growth last financial year). That also means there were higher inter-corporate transactions this quarter.

“We are comfortable. This is because on an overall basis our target for entire year is 19 per cent. Our experience is that first quarter is always conservative. We have always been getting in the last quarter about 40 per cent of annual collections. We are on track for achieving our overall targets this year, too. There is no question of any doubts,” Mr Chandra said.

Meanwhile, the Centre's gross tax collections has crossed the Rs 1-lakh-crore mark this fiscal to touch Rs 1,00,884 crore as of June 17, registering a 24 per cent increase year-on-year. Refunds have seen a whopping 190 per cent increase to Rs 40,797 crore (Rs 14,032 crore).