CORPORATE advance tax payments for the final quarter of the fiscal year have risen sharply, indicating that earnings for the January-March period, scheduled to be announced next month, could be robust. That would be good news for the capital markets that have been dragged down by the turmoil in world financial markets and are desperately looking for positive cues.
The advance tax numbers rose 110% compared to last year. With respect to the nine Sensex stocks, which have a 48% weightage in the Sensex, the advance tax numbers have risen 88%.
ICICI Bank, the country’s largest private bank, paid Rs 250 crore compared to Rs 125 crore last year while Reliance Industries paid Rs 443 crore against Rs 118 crore. L&T’s tax payment totalled Rs 170 crore, more than double of what it paid last year. Ambuja Cement paid Rs 170 crore against Rs 100 crore last year.
Advance tax payments of Bank of Baroda, Dena Bank and MRPL rose more than five times.
Tata Motors and Tata Steel, however, saw a fall in their advance tax payments. While the country’s largest commercial vehicles company paid Rs 75 crore in the January-March 2008 period compared to Rs 190 crore paid last year, Tata Steel’s advance tax payment for the quarter was Rs 300 crore, lower than the Rs 350 crore paid in the same period last year.
The surge in tax payments will also be beneficial for the government, which had proposed a Rs 60,000-crore debt wavier for farmers in Budget 2008.