A slowdown in credit growth and possible losses on account of forex derivative exposure does not seem to reflect in the fourth quarter 2007-08 advance tax payment by leading financial firms, including the State Bank of India and ICICI Bank.
A closer look at the provisional top 100 advance tax paying firms reveals that as many as 38 financial companies contributed Rs 7,433 crore to the total advance tax of Rs 19,346 crore paid by these firms.
In other words, advance tax paid by the leading financial companies in the fourth quarter of 2007-08 rose by a whopping 72 per cent, compared with Rs 4,299 crore they paid in the same quarter in 2006-07.
In effect, the profitability of most financial sector firms seems to be intact.
In contrast, the telecom services sector has not fared well. Companies like Bharti Airtel, BSNL and MTNL saw a decline of 35 per cent, 100 per cent and 88 per cent respectively in their advance tax payments in the quarter under review.
Some energy sector firms like ONGC, auto firms like Tata Motors and metal companies like Hindalco have also paid lower advance tax.
Overall growth in advance tax payments stands at around 34 per cent in the fourth quarter, similar to the trend witnessed in the comparable period during the previous fiscal. This reaffirms the buoyancy in direct tax collections, which are expected to grow at over 40 per cent in 2007-08.
The advance tax payment has touched Rs 40,000 crore in the fourth quarter and another Rs 10,000 crore is likely to be added once the data is fully compiled.
Among other sectors, software, engineering and mining firms have reported higher advance tax payment.