Advance tax collection is higher in December quarter

Mumbai, Ta. 18 December 2020, Friday

The 8% increase in advance tax payments for the December quarter indicates a sharp rise in direct tax collection. Companies with higher advance tax payments are optimistic about their revenue growth, an analyst said. The unprecedented rise in the stock market has also led to an increase in advance tax payments.

Corporate advance tax is Rs 1.10 trillion while Rs 31,000 crore is paid by individual taxpayers as advance tax.

The advance tax paid by the companies has increased by 30 per cent on an annual basis, according to the data. Advance tax paid by corporates and individual taxpayers in the December quarter has increased by 3 per cent.

Strong recovery in advance tax indicates a sharp improvement in economic performance in the third quarter of the current financial year. For the December quarter, Rs 1.31 trillion was received in advance tax, sources in the income tax department said.

In addition to corporate income, the rise in the stock market has led to a significant increase in the income of speculators and stockbroking houses, said the MDA of a stockbroking house. He hoped that the stock market rally would remain intact for another two years in view of lower interest rates. The rise in advance tax collection in the December quarter has also reduced the amount of net direct tax collection which has eased the current situation for the government.

Net direct tax collection has come down to 12 per cent from 5 per cent on December 1. Excluding refunds, direct tax collection stood at Rs 2.7 trillion as against Rs 2.7 trillion in the same period last year. In the current financial year's budget, the direct tax collection is estimated at Rs 16.12 trillion.