By IANS,
New Delhi : The growth in advance tax payments by corporates during the June quarter reflect that the fears of economic slowdown are unfounded, a finance ministry statement said here Friday.
Advance tax payments grew by 24.1 percent during the quarter.
Although the growth rate this year is less than the corresponding rate of 27.9 percent for 2007-08, the growth in corporate tax deducted at source (TDS) is 60.5 percent this year against 43.1 percent last year, the statement said.
It is clear that the marginal decline in the growth of advance tax payment is because of substantially higher contribution from TDS of the corporate taxpayers, the statement added.
Companies generally estimate their TDS outgo and reduce the advance tax liability accordingly. Combined growth rate of advance tax and TDS this year is 40.3 percent as against 34.3 percent last year, the statement said.
If advance tax payments of the top 10 corporate taxpayers for the June quarter are compared, the growth rate comes to 7 percent. This is due to the reason that some of the prominent oil distribution companies have been badly hit by the spike in international crude prices, the statement said.
If the top 100 companies are taken into account, the growth in advance tax payments is 17 percent.
However, the overall growth of advance tax payment of all the companies is around 24 percent for the June quarter indicating that small and medium enterprises (SMEs) have, in fact, paid proportionately high advance tax, thereby belying any conclusion of slowdown in the economy based on advance tax payments, the statement said.