Domestic majors pay advance tax, foreign banks lag

Indian banks, both public and private, have paid higher advance taxes for the December quarter as compared to the same period a year-ago but foreign banks are lagging behind as per data available. The country’s largest lender, State Bank of India, paid an advance tax of Rs 1,850-crore as against Rs 1,795-crore in the year-ago period while the second-largest, ICICI Bank, paid Rs 450-crore as against Rs 301-crore in the corresponding period last year, an Income Tax source told PTI here.

Other companies in the sector, like mortgage lender HDFC Bank (Rs 750-crore v/s Rs 400-crore), Mahindra and Mahindra Financial Services (Rs 89-crore v/s Rs 80-crore), General Insurance Corporation (Rs 95-crore v/s Rs 43.5-crore) and LIC Housing Finance (Rs 70-crore v/s Rs 56-crore) give an optimistic picture of the sector.

Staggered system

State-run Life Insurance Corporation (LIC)’s outgo stood at Rs 1,067-crore as against Rs 981-crore in the same period last year while IDBI showed a massive rise in tax payment at Rs 209-crore as against Rs 74-crore in the year-ago period.

Advance tax payment is a staggered system of paying taxes and is generally seen as a barometer of a particular company’s performance as the tax payments are made in line with profit expectations.

However, foreign banks led by Standard Chartered, the only company to have an IDR, which paid Rs 325-crore as against Rs 480-crore last year, proved to be dampeners in an otherwise cheerful story. “I do not know the exact reasons. The policies governing them have been the same, their businesses are the same and the country is also growing,” the source said.

Citibank paid an advance tax of Rs 200-crore as against Rs 230-crore in the year-ago period while BNP Paribas paid Rs 32-crore, down from Rs 55-crore last year, the source said. The only exception to this trend was HSBC which paid Rs 198-crore as against Rs 175-crore in the year-ago period.