Self-reporting of income estimates and advance tax liability

The draft, which contemplates the addition of Rule 39A to the I-T rules, has rekindled the debate over legitimate concerns of transparency vis-a-vis the potential for adverse consequences on taxpayers

The recent introduction of a draft notification to create a self-reporting mechanism for estimates of current income, tax payments and advance tax liability for companies or persons liable for audits under Section 44AB of the Income Tax Act has not been met with much enthusiasm from corporates.

The Central Board of Direct Taxes (CBDT) draft, which contemplates the addition of Rule 39A to the Income Tax Rules, has also rekindled the debate over legitimate concerns over transparency vis-a-vis the potential for adverse consequences such as enhanced compliance and greater scrutiny on taxpayers. 

“The proposed mechanism appears as an attempt to better capture