Corporate tax up 14.7 pct in Sept qtr - official

A cashier checks currency notes inside a bank in Agartala in this July 24, 2009 file photo.

NEW DELHI (Reuters) - India's corporate advance tax in September quarter is estimated to have grown 14.7 percent on year against a fall of 3.7 percent in the first quarter of FY10 mainly due to strong recovery in banking, auto and consumer durable sectors, a finance ministry official said on Tuesday.

However, the government expects better growth in corporate advance taxes in the December quarter, the official who did not wish to be identified, added.

Finance Minister Pranab Mukherjee in his July budget had estimated direct tax receipts in 2009/10 at 3.70 trillion rupees, including 2.57 trillion rupees through corporate tax.

The tax receipt estimates were later revised upward to 4 trillion rupees by the finance ministry.

"Corporate tax receipts are up by 14.7 percent in September quarter compared to decline of 3.7 percent in June quarter. We expect better growth in December quarter," the official told reporters, while citing provisional data untill September 19.

Corporate advance tax receipts stood at 383.67 billion rupees a year ago, he said

According to Income Tax Act provisions, corporates have to deposit 45 percent of their tax until September 15 on the estimated net profit in a financial year, he said.

He said revised estimate of 4 trillion rupees of net direct tax collections in FY10 may be difficult to achieve, but budget estimates of 2.57 trillion rupees as corporate tax and total direct tax of about 3.70 trillion rupees may be achieved by March end.

The tax receipts for September quarter indicated that consumer durables led by automobile, software, cement, banking have shown strong recovery, while corporate tax in realty and metals, particularly steel remained down, he said.

Banks's tax payments also indicated improved performance in September quarter. Country's largest lender State Bank of India (SBI) deposited 18.32 billion rupees in September quarter, up 17.44 percent from a year ago.

"Manufacturing sector has definitely shown a strong growth on account of strong rural demand in domestic market though service and agriculture sectors have not done so well," said D S Rawat, Director General of Associated Chambers of Commerce and Industry.

Personal income tax receipts, estimated at 1.13 trillion rupees in FY10, were up by 1.7 percent to 54.92 billion rupees from July-Sept 19, compared to a year ago, the finance ministry official said.

Advances tax paid by individual tax payers had dipped 44 percent on year in April-June to 7.25 billion rupees, official said.

(Reporting by Manoj Kumar; editing by Sunil Nair)

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