The income tax (I-T) department is closely monitoring advance tax payments of companies by scrutinising their annual and quarterly balance sheets as well as sectoral growth trends in an earnest attempt to ensure organisations do not delay their tax liabilities for the financial year, reported by Business Standard.
According to the report, as per the I-T department’s central action plan for 2023-24, financial reports of the top 100 listed companies in their last published annual reports, and quarterly reports through the year, will be examined. Senior officers will monitor the advance tax collection and they have been asked to concentrate on “notes” and observations on financial accounts, if any.
Citing a source privy to the development, the newspaper reported that tax officials will also examine growth trends in some sectors such as real estate, pharmaceuticals, steel, mining, financial institutions, and gems & jewellery.
A tax sleuth told Business Standard, “It is pertinent to study the balance sheets of companies in each sector to know whether the payment made by them is in sync with their earnings outlook.”
Advance tax payment is the process of paying tax before the end of the financial year, on income you earned in the same year. Companies and partnership firms pay taxes in four instalments on June 15, September 15, December 15 and March 15.
Firms would pay the first instalment of advance tax by June 15. A strategy has been chalked out to carry out quality checks before raising tax demand, and to pay special attention to recovery of dues. Officials said that the idea is aimed at widening the tax net. Under this action plan, greater focus will be put on tax collection at source and enforcement mechanisms will be used to check tax evasion. It is likely that this will increase the taxpayer base by 10 per cent by 2023-24.