Income-tax department calls big corporate entities to pay advance taxes | Business Standard News–13.09.2017

The income-tax (I-T) department is “coaxing” top corporate entities to make the 45 per cent of the total advance tax payment by September 15, the due date for the second instalment.
Sources said tax officials were meeting executives of the top 45-50 advance tax-paying firms to persuade them to make the payment of 45 per cent of the full-year’s advance tax.
The Central Board of Direct Taxes (CBDT) in a recent meeting directed income-tax commissioners to pull up their socks on revenue collection. The CBDT has set an October deadline for achieving the desired growth rate of tax collection.
Citing the June quarter’s advance tax collections, officials said advance tax and tax deducted at source (TDS) payments were significantly lower than in the same period a year ago. Officials refused to disclose the advance tax outgo but hinted that it was in single digits.
The tax department conducted “outreach programmes” over two days to educate these companies on specific tax provisions and procedures related to advance tax collection.
“Continuous engagement with top advance tax payers in each region will help us understand the companies’ issues and accordingly we can help them with their concerns,” said a tax official with knowledge of the development.
The CBDT has asked tax officials to click pictures of the meetings and prepare a brief report on the inputs received.

“This is a pre-emptive measure that the department is taking to ensure that the tax collection target is on track. As advance tax accounts for a major percentage of the total direct tax collection, we are encouraging companies and individuals to pay instalments to avoid the last-minute rush,” the tax official added.

Sources said inconsistency in the advance tax outgo by companies had prompted the tax department to take this initiative.
Companies often postpone paying a large chunk of advance tax till the second half of the financial year.
Besides, sales in some industries have been adversely affected by the implementation of the goods and services tax (GST). The pharmaceuticals and software industries are going through a rough patch.

Further, the Budget estimation of Rs 9.80 lakh crore collected from direct taxes in the current fiscal year has started haunting the taxman.

Sources said the CBDT was unhappy with the income-tax department’s performance. According to the board, the increase in gross tax collection in the first quarter was mainly due to lower refunds. The CBDT fears that if the income-tax department were to issue refunds in large numbers in the coming quarters, the growth rate could dip.

According to finance ministry data, direct tax collection was up 17.5 per cent to Rs 2.24 lakh crore in April-August. This was mainly due to tax collected from individual taxpayers net of refunds.
Personal income-tax collection rose 16 per cent, while the corporate tax mop-up grew 5 per cent. Refunds amounting to Rs 74,089 crore have been issued in April-August, 7.2 per cent lower than during the corresponding period of the previous fiscal year.
Further, the CBDT has asked the income-tax department to review weekly collections through advance tax, TDS and recovery from arrears and current demand. The CBDT wants senior officials to abide with the central action plan target and has also set an October deadline for clearing all pending matters at various levels.
The top advance tax payers include State Bank of India (SBI), Reliance Industries, Larsen & Toubro, Housing Development Finance Corporation, Tata Consultancy Services, Hindustan Unilever, Tata Steel and public sector oil companies.
Advance tax is a system of staggered payment of income tax across the year in four quarterly instalments. According to the Income-tax Act, companies are required to pay 15 per cent of their total advance tax by June 15, followed by 30 per cent each in September and December, and the remaining 25 per cent in March.
Advance tax payment is considered to be a barometer of a company’s performance during a particular quarter.

via Income-tax department calls big corporate entities to pay advance taxes | Business Standard News

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