Advance tax collections for the second quarter of the current financial year (2009-10) have shown strong growth of 35 to 40 per cent across industries, reinforcing the government’s hopes of a sooner-than-expected recovery.

Although total tax collections are yet to be officially collated, Mumbai’s large tax payer unit has collected Rs 2,628 crore in the second quarter against Rs 895 crore in the last quarter.

Higher advance tax payment by some of the top firms in the second installment of 15 September 2009 means their profits may rise in Q2 September 2009 over Q2 September 2008. As per reports, State Bank of India, India’s biggest commercial bank by branch network, has paid 71.5% higher advance tax at Rs 1,832 crore in the second quarter of 2009-10 over the corresponding period last year. Software major TCS has reportedly paid 315% higher advance tax at Rs 220 crore in the second installment. Tractor major Mahindra & Mahindra has reportedly paid 540% higher advance tax at Rs 112 crore in the second installment.

Tata Motors paid advance tax of Rs 100 crore in the second installment, much higher than Rs 19 crore last year. But Larsen & Toubro paid Nil advance tax against Rs 150 crore paid in the corresponding period last year.

Among public sector banks like Bank of India paid Rs 470 crore as against Rs 230 crore and Bank of Baroda paid Rs 412 crore compared to Rs 255 crore. Private sector lender Yes Bank paid Rs 58 crore as against Rs 33 crore in the corresponding period last year.

During the second quarter BPCL and Lupin paid Rs 312 crore and Rs 49.7 crore respectively as against Rs 40 crore, and 11.4 crore in the same period a year ago.Ambuja Cements paid an advance tax of Rs 150 crore for the July-September quarter vs Rs 70 crore in the previous quarter.

The target for direct tax collections for 2009-10 has been fixed at Rs 3, 70,000 crore, roughly 10 per cent higher than Rs 3,38,212 crore last year.

Most industries, especially automobile and infrastructure companies like Tata Motors, L&T and Reliance Industries, have done well.

For instance, India’s largest bank, State Bank of India, saw second quarter advance taxes at Rs 1,838 crore, 78 per cent more than Rs 1,068 crore paid in the first quarter  If total tax payment projections are calculated on the basis of the first quarter payout, which is typically 15 per cent of the annual pay-out, annual tax works out to Rs 7,120 crore.