When it comes to advance tax payments, pharma has emerged as one of the outliers with the sector showing a higher payout this quarter, while real estate, infrastructure, steel and cement were among segments that crumbled under the weight of the coronavirus-induced lockdown.
Data analysed by the department for the current month showed a fall of over 35% over the year-ago period, which points to weak advance tax collections.
While the sectoral break-up was not immediately available from the government, a source said consumer goods as well as bank had held steady at the time of the payment of the first instalment of advance tax.
Sales across sectors have been hit by the lockdown and pharma was no exception as initial numbers suggested that the pharma sector too saw a near 20% decline in sales during April, compared to March numbers.
Advance tax is seen to be a good barometer of corporate sector performance and economic activity. Data collated by the income tax authorities suggests that corporation tax collection so far in June was around 37% lower, while personal tax saw a near 35% decline. Securities transaction tax was the only segment to have registered an increase during this period.
An income tax officer said tax deducted at source had held steady, indicating that some bit of economic activity was there, apart from payment of salaries, on which there is TDS.
“There are several sectors which are completely devastated, real estate being one of them. It is all linked to the overall sentiment. Will anyone buy property in this market?” an officer said.
Tax officials, however, said they were seeing significant pick-up in economic activity in June and most indicators were also pointing towards that, raising expectations of a major improvement when the next instalment of this outgo becomes due on September 15. “We are hoping that things will be significantly better by the end of the year, helping us achieve a large part of the target,” said an officer.
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