|
March 17, 2009 04:50 IST
Last Updated: March 17, 2009 10:38 IST
Preliminary advance tax collections show that banks, mainly government-owned ones, have shored up collections for the fourth quarter of the financial year 2008-09, even as the manufacturing sector continues to suffer sluggish demand.
State Bank of India [Get Quote] tops the list, paying Rs 1,810 crore (Rs 18.10 billion) against Rs 1,410 crore (Rs 14.10 billion) in the same quarter last year. Bank of India has paid Rs 590 crore (Rs 5.90 billion) against Rs 194 crore (Rs 1.94 billion).
Section 208 of the Indian Income Tax Act, 1961, makes it obligatory for all companies and individuals to pay advance tax in four quarters of a financial year when the annual advance income tax payable is Rs 5,000 or more. Collections are still under way in some centres because March 15, the due date for collection, fell on a Sunday.
The government has revised the all-India target for the current financial year downwards and following that the target for Mumbai, which accounts for more than half the country's corporate tax collections, has been revised from Rs 1,50,000 crore to Rs 133,000 crore (Rs 1,330 billion).
In 2007-08, tax department officials said Mumbai exceeded the target of Rs 107,000 crore (Rs 1,070 billion) by collecting Rs 113,000 crore (Rs 1,130 billion).
Official sources said banks had benefitted both from the lower interest rate regime triggered by a series of interest rate cuts by the Reserve Bank of India and from collecting interest from retail, personal and home loans, which are still high.
Reserve Bank of India guidelines to restructure loans, which would have been otherwise classified as non-performing assets, also reduced the amount of provisioning that banks have had to make, so profits and hence taxes have risen to that extent. Added to this are the interest rate subsidy under the Rs 60,000 crore (Rs 600 billion) farm loan waiver and other relief on various types of priority sector loans to avoid showing bad loans on the books.
Data from the foreign banks are yet to be collated, but data available so far suggest that HSBC has emerged the highest payer at Rs 350 crore (Rs 3.50 billion).
Among manufacturing companies, the department is yet to collate the figure for Reliance Industries [Get Quote], India's largest company by market capitalisation, but other giants like Mahindra and Mahindra and Tata Motors [Get Quote] have paid no tax for the quarter. Neither have government-owned oil refineries Bharat Petroleum Corporation Ltd [Get Quote] and Hindusthan Petroleum Corporation Ltd.
Among other Tata Group firms, holding companies Tata Industries and Tata Sons did not pay advance tax because they were, being investment companies, taxed on capital gains and the sale of their 25 per cent stake in Tata Teleservices [Get Quote] is yet to materialise, despite regulatory approval, said department sources. Tata Power paid just Rs 7 crore (Rs 70 million) against Rs 43 crore (Rs 430 million) last year.
Powered by 
| |
Ask a question
Get latest news on your desktop