Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Direct Tax »
Open DEMAT Account in 24 hrs
 CBDT drops small tax demands but not TCS, TDS claims
 ITR Refund: Awaiting money from Income Tax? Here's why you have not yet received your amount
 Income Tax Notice: What to do if you receive a Section 143 (1) notice from taxman?
 Average tax return processing time cut to 10 days: CBDT
 7 types of Income Tax Notice ITR filers may receive for AY 2023-24
 ITR filing: Do these advance preparations before filing your income tax return
 What are the strategies to maximize tax refunds after submitting an income tax return (ITR)?
 ITR filing: Tax rules on income from house property that your should know
 CBDT likely to issue rules on angel tax next week
 Pension Taxation: Everything you need to know for ITR filing
 Income tax guide on pension: How to file pension income in ITR?

Companies may have to submit income estimates by 15 November
September, 21st 2017

Income tax officers chasing the government’s revenue targets may no longer have to informally call up chief financial officers of companies enquiring how much advance tax they are about to pay in a quarter or gently persuade them to err on the higher side on their tax outgo.

The Central Board of Direct Taxes (CBDT) has proposed to introduce a new rule asking companies with annual income of Rs1 crore and professionals with Rs50 lakh income per year to report estimates of current income, tax payments and advance tax liability on a voluntary basis.

The estimate of income up to 30 September has to be given by 15 November, which gives assessees about 45 days to make an estimate. Although taxpayers will have an idea of their cash receipts, they may have to wait till the end of the financial year to decide whether it can be recognized as income accrued and therefore it will still be treated as an income estimate for the half-year period.

In case, the income estimate is less than the income for the previous corresponding period by Rs5 lakh or 10%, whichever is higher, the assessee has to give another estimate of income as on 31 December before the end of the following month.

Once this requirement proposed in a draft rule is implemented, the tax department will have a new set of data on estimated income for the financial year which will help in identifying sectors and regions where tax receipts are lagging behind. It will also boost the department’s revenue mobilisation steps.

 

An official statement from the finance ministry said that accurate estimation of current income and advance tax liability will help assessees avoid interest for default or deferment of advance tax.

“The proposed changes in rules on intimation of estimated income and tax liability is aimed at closely monitoring revenue collections. It will enable the tax department to project revenue receipts more accurately,” said Amit Maheshwari, partner, Ashok Maheshwary and Associates Llp.

Experts said the proposed draft rule will increase the compliance burden for the industry.

“The details to be provided in Form 28AA regarding details of taxable income for the period up to 30 September or 31 December of the year immediately preceding the ‘previous year’ may not be readily available with the companies and they may be required to undertake further exercise to compute the same as the said details has to be accurate but not merely an estimate,” said Amit Singhania, partner, Shardul Amarchand Mangaldas & Co., a law firm.

‘Previous year’ in tax parlance refers to the financial year in which taxable income is earned.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting