Most companies that figure in the list of 100 top taxpayers from Mumbai have reported a higher tax payment for the April-June quarter an indication of improved earnings over the year-ago period.
Multiple sources in the income-tax department said the rise in tax payments was 10-20 %, a significant development given the slowdown in the economy. The numbers are not exactly comparable to the first quarter of last year, which recorded a stunning 70% increase in corporate tax payment as the economy was then in the midst of an unprecedented boom, with GDP close to 9%. Direct tax collections from Mumbai account for 35-45 % of the all-India collection.
The first instalment of advance tax, which falls in June, usually accounts for 15% of the total tax payable for the fiscal. However, a clearer picture will emerge only by September, when companies are expected to pay 40% of the total tax for the fiscal. In 2008-09 , tax outgo began to shrink from September.
Indias largest bank, State Bank of India , has recorded an impressive 60% rise in its first quarter tax payment at Rs 1,070 crore. The banks first quarter tax payment last year was Rs 663 crore. The higher profit, of which the tax is an indicator , has been attributed to the cut in deposit rates without a simultaneous cut in lending rates.
The countrys largest private sector bank, ICICI Bank, too, recorded a higher tax payment than last year. From Rs 340 crore last year, it has increased to Rs 366 crore this year. In 2008-09 , too, the banking sector showed a high level of growth while companies in most other sectors, except pharma, recorded a steep fall in advance tax payments.
Insurance major Life Insurance Corporation (LIC) recorded a marginal increase in tax payment at Rs 475 crore, up from Rs 435 crore during the corresponding period last year.