Indian companies are estimated to have paid 18% higher tax in the June quarter, compared with the year-ago period, signalling strong recovery in the economy. Although it will take three more days for us to compile the figures, we know that the tax collection has gone up at least 18% CBDT chairman SSN Murthy told ET. The figure will be announced by the month-end, he said.
Back-of-the-envelope calculations suggest Indian companies have paid at least Rs 30,680 crore in the June quarter against Rs 26,000 crore in the year-ago period.
Since the advance tax payment in the June quarter normally accounts for 15% of years total, analysts say the corporate tax collection in 2010-11 may be around Rs 2,04,530 crore.
An income-tax official, who did not wish to be named, attributed the surge in the June quarters tax collection to higher profit of most companies, in the 10-30% range.
Moreover, oil marketing companies which did not pay tax last year in the absence of receipt of payment from the government, paid advance tax this time, the official said. In addition to oil companies, banks and pharmaceutical companies paid substantially higher tax, year-on-year, he added.
Mumbai, which accounts for 37%-40% of the countrys direct tax collection, has reported nearly 15% increase in tax receipts, and I-T authorities are hoping the combined direct and indirect tax collection will meet the target of Rs 4,30,000 crore this year. Last year, the collection was at Rs 3,75,000 crore.
In the previous two financial years, tax collection fell short of target. In 2008-09, it was Rs 60,000 crore lower than the target, following the slowdown in the wake of the collapse of Lehman Brothers. Collection improved marginally in 2009-10, but it was lower than the revised target of Rs 4,00,000 crore.