Q3 advance tax numbers indicate slowdown in earnings

If advance tax numbers are something to go by in judging the Q3 earnings of the top companies, it surely indicates towards a weak performance. Top firms have seen a tepid growth in their Q3 advance tax figures. Top banks have witnessed a big drag in their numbers.

Income tax that needs to be paid in installments during the year, instead of lump sum payment at year end is known as advance tax or “pay as you earn tax”.

Accordingly, the overall advance tax collection made from the top 43 Mumbai-based corporates has risen only 10 per cent to Rs 27,321 crore from Rs 24,811 crore ayear ago.

Countries two largest lenders SBI and ICICI Bank have paid Rs 1,282 crore, down 25 per cent from Rs 1,731 crore and Rs 1,200 crore, down a steep 27.3 per cent from Rs 1,650 crore respectively in the year-ago period.

Oil & gas major Reliance Industries has paid Rs 2,600 crore in advance tax in the third quarter of the current year which is 10 per cent more than the previous year's amount.

Going ahead, advance tax numbers are likely to further decrease owing to demonetisation impact on companies’ earnings.