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Top 100 Cos Post a 10 Percent Higher Advance Tax in Q3

  • Despite the overall gloom in the market, initial advance tax numbers have not been too disappointing.As the name suggest advance tax is the tax paid in advance for the income of a particular financial year. The normal expectation is that tax has to be paid only when the income is earned but under the tax provisions the tax payer has to actually estimate the income for the entire year and based on this pay advance tax at specific time intervals.

Advance Tax a mixed bag

  • The third advance tax, which was due today, provide cues on Q3 December 2011 corporate earnings. These numbers are the tell-tale signs of the profit numbers that can be expected in the quarterly results, as well as are an early sign of the performance of the company.Advance taxes are collected in four installments — 15 percent by 15 June; 40 percent by 15 September; 75 percent by 15 December and 100 percent by 15 March.The advance tax numbers from India Inc have been quite mixed so far with only a few companies showing year-on-year increase.Advance tax payouts by leading Indian corporates mostly remained flat in the third quarter, suggesting that the slowdown is impacting their bottomlines.
  • While pharmaceutical companies have done well, smaller banks have been hit by the slowdown. Capital goods numbers are disappointing while initial auto numbers are largely flat. While the advance tax payment by LIC and Bank of Baroda has shown an improvement, L&T and General Insurance Corporation paid nearly the same amount as in the corresponding quarter last year.Top 100 companies see 10 percent rise in advance tax.
  • The list of companies that have made no advance tax payout is led by state-run oil marketers such as Indian Oil, which is the nation’s largest corporation by revenue, Bharat Petroleum and Hindustan Petroleum. The IT official said oil companies normally do not pay advance taxes in the initial quarters, but in the last quarter, when the government pays them the subsidy compensation.Reliance helps pull Sensex in positive territory

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