Approximately 500,000 taxpayers got notifications from the Income Tax department about their advance tax payments between April and August of this year. The notifications concerned either no advance tax payments or reduced advance tax payments.
The council has provided these indications after evaluating the significant transaction data for the previous fiscal year and the first quarter of the current financial year.
According to the department’s investigation, there were about 2.5 million instances in FY23 where taxpayers with high incomes and large outlays submitted either insufficient or no advance tax payments.
An official with knowledge of the situation said that in some cases, taxpayers filed advance tax payments for the first quarter of the current fiscal year (April to June) with lower taxes than their high-value purchases, indicating a disparity. This step is being done in advance of the second advance tax installment due on September 15.
The number of taxpayers avoiding advance tax payments has significantly increased over the last three to four years, according to sources, and these measures will act as a disincentive to taxpayer noncompliance.
Also read, Uday Kotak: “A remarkable journey… I don’t wish to keep hankering for seat.”
Installments that Taxpayers Have to Pay:
The four installments for advance taxes are June, September, December, and March. These payments give information about possible tax collection in the following months and are based on taxpayers’ projections of their future income.
The typical tax payment schedule is as follows: 15% in June, 45% in September, 75% in December, and the full amount in March. Since total tax collection increased by only 2.8% between April and July while net revenue decreased by more than 13%, the government is attempting to plug direct tax leaks. This has two effects: it encourages pertinent taxpayers to pay back taxes on time and hastens tax revenue collection for the government throughout the fiscal year. Additionally, notices are also being sent to taxpayers who made significant stock market profits the previous year and bought expensive vehicles and real estate. This highlights a potential discrepancy between their income and degree of investment.
For more business news, click here.
