Corporate advance tax collections fell 22 per cent during the third quarter of fiscal year 2008-09 to Rs42,600 crore year-over-year against Rs54,900 crore collected in the corresponding period last year.

Overall tax collections for the April-December period (ended 15 December) declined 2.6 per cent to Rs1,13,000 crore against Rs1,16,000 crore collected in the corresponding period last year, finance ministry sources said.

Direct tax collections grew 11.5 per cent to Rs2,32,000 crore till 24 December of this fiscal from Rs2,08,000 crore in the previous year. Corporate tax collections also rose 15.3 per cent to Rs1,50,000 crore from Rs1,30,000 crore.

Corporate advance tax collections in Mumbai, which contributes about 35-40 per cent to the country's tax kitty, have fallen below last year's level thanks to the general slowdown in the economy.

Tax collection by way of TDS (tax deducted at source) registered an increase of over 34 per cent to Rs29,000 crore, taking the total tax collection to Rs83,400 crore. This has helped the total collection from Mumbai, including advance tax and TDS, to rise 6 per cent from last year against the 60 per cent growth recorded last year.

So far, Mumbai has managed to collect Rs83,400 crore, while the projection for the entire fiscal is Rs157,000 crore.

This is the first time in the last five years that advance tax collection from Mumbai has fallen.

Companies, firms and individuals pay advance tax based on their income projections for the financial year. Companies pay this in four installments in the months of June, September, December and March respectively, while individuals are required to pay it in three installments – September, December and March.

A decline in collections implies that companies are expecting lower profits for the current fiscal year and individuals are expecting lower incomes.