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Firms need to give income estimates to I-T dept by November 15

This information will help I-T dept to get an idea about trend of income of the entity on an almost real-time basis

Press Trust of India  |  New Delhi 

Rupee

and who have to get their accounts audited will be required to submit their income estimates and liability for six months (April to September) of the financial year to the income-department by November 15. The (CBDT) has come out with a draft notification seeking stakeholders' comments on filing of Form 28AA by giving details of income and advance taxes paid. Also, businesses have to specify a reason for any reduction in advance payment compared to preceding financial year. This information will help the department to get an idea about the trend of income of the entity on an almost real-time basis. Also in cases where the total income has declined by Rs 5 lakh or 10 per cent, whichever is higher, compared to preceding fiscal then the payer will have to furnish a similar statement of income and liability for April- December period by January 31. Under the present mechanism, have to only pay advance to the on payable for the full fiscal in four instalments-- June 15, September 15, December 15 and March 15.

They need not provide the I-T department estimates of income. "It is proposed to create a mechanism for self-reporting of estimates of current income, payments and advance liability by certain viz. and audit cases, on voluntary compliance basis," the (CBDT) said in a draft notification. The plans to insert Rule 39A in the Rules wherein and those assessees who have to get their accounts audited will have to submit Form 28AA, giving details of income and paid. "An assessee being a company and a person, to whom the provisions of section 44AB are applicable shall furnish an intimation of estimated income and payment of taxes as on September 30 of the previous year, on or before November 15 of the previous year," said the draft notification on which has invited stakeholder comments by September 29. If the income estimated as on September 30 of the previous year is less than the income of the corresponding period of the immediately preceding year by Rs 5 lakh or 10 per cent, whichever is higher, then the assessee would be required to furnish an intimation of estimated income and payment of taxes as on December 31, added. A continuous flow of revenues throughout the year is critical for the government so as to meet various budgetary allocations such as welfare schemes, infrastructure development, defence expenditure etc. "A reliable and advance estimate of revenues for the year would also provide much needed perspective for planning and prioritising the Government expenditure," the said in a statement. A taxpayer who is liable to discharge part of its liability by way of advance has to bear additional burden of interest for default of advance tax, in case total advance paid for the year falls short of the assessed by ten per cent or more. Such are further liable to pay interest for deferment of advance tax, in case any quarterly instalment of advance paid falls short of the prescribed percentage of total advance paid. "It is of utmost importance for such to arrive at a reasonably accurate estimate of their current income and advance liability, so that the additional burden on account of interest for default/deferment of advance can be avoided," the said. Nangia & Co Associate Director Shalu Kedia said current advance taxes is paid based on estimated income and interest is levied for any shortfall in the payment of advance liability at the time of filing return of income. "Considering that the final computation of income at the close of the financial year may vary significantly from the estimates filed for six months/nine months, the variance could become a matter of discussion during the assessment proceedings," Kedia said. We are surely moving fast towards transparency, but additional compliance on India Inc may not go down well, when the corporates are already struggling with GST and Ind-AS (Indian Accounting Standard) compliance, she added.

First Published: Tue, September 19 2017. 18:32 IST
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