Tax payers will now have to pay FBT when they make payments for advance tax to the governments. Budget 2007-08 has aligned the due dates for payment of FBT with advance corporate or income tax.
Finance Minister P Chidambaram has proposed amendments in the provisions of the FBT which will align the advance FBT payments with corporate tax or personal income tax payments. Earlier, a tax payer had to pay FBT after the completion of the quarter on the amount which was already spent. After the aligning of the dates, he will have to make advance payment as specified.
Earlier, an assessee had to pay FBT for each quarter gone after the end of quarter. But, now by aligning it with the income tax rate they will have to pay 15 days in advance according to the advance tax schedule.
The companies have to pay not less 15% of the advance tax before June 15, 45% on or before September 15 and 75% as reduced by the amount paid in earlier installment by December 15 and whole amount by March 15 of the financial year.
According to KPMG, Director, Vikas Vasal with this change a tax payer will not have to pay tax to the same department at two different dates and he can make his payment on the same day.
The assessee would now have to make an assessment of his expenditure in advance on the same lines as his income.