Corporate tax payments flat in Q4; govt to miss target

Corporate India's advance tax payments for the last quarter of the financial year showed subdued growth, leading to fears that the government's direct tax target of Rs5.8 lakh crore would be missed by at least Rs50,000 crore.

Most of the top corporate houses have paid marginally higher advance tax for the quarter ending March with some firms posting moderate growth, while many others showed lower or flat growth.

Experts saw this as a sign of the liquidity crunch, which has restricted capital expenditure plans of many companies, as the advance tax payment was largely flat.

The government has targeted a fiscal deficit of 4.6 per cent of GDP for the year; but with a shortfall in direct tax collection, which includes corporate and personal income tax, combined with below-target proceeds from disinvestment in state-owned companies, the fiscal deficit could be higher by several percentage points.

Officials said that their reports show Mumbai, which accounts for 35-40 per cent of the all-India direct tax collections, will not be able to meet the basic target of Rs2.04 lakh crore.

Foreign banks were the best performers, reporting a substantially higher profit than last year.