In a signal of robust increase in corporate incomes, overall advance tax payments by the India Inc for the current financial year have increased by buoyant 22%. Total advance tax paid by the corporates reached Rs 1.97 lakh crore in the current fiscal compared Rs 1.60 lakh crore in the last fiscal.
Highest tax payer as per the advance tax figures was publically controlled ONGC which paid Rs 8,492 crore, an increase of 35% compared to 2009-10. Another oil sector major, Reliance Industries, saw its overall advance tax payment increase by 38% to Rs 4,244 crore in the current financial year. Insurance major LIC paid Rs 3,599 crore as advance tax, nearly 11% higher than previous year.
Advance tax payments are often considered as a good barometer of overall performance of the economy and also serve as a lead indicator for growth in overall gross domestic product. However, part of the growth seen this year could also be attributed to the somewhat lower base as growth last year was weaker in many sectors and hence tax outgo also grew at a slower pace.
Nonetheless, the robust growth in tax receipts indicates that overall economy was doing well and if the trend continues, it will help the government meet an ambitious budgeted fiscal deficit target. The finance ministry has pegged fiscal deficit at 4.6% for the next fiscal. But experts have been raising doubts that given the high crude prices and implied increase in subsidy outgo, it would be difficult to adhere to the target deficit, particularly in light of the fact that there will be no one time receipt like the 3G revenue in next fiscal.
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