New Delhi The Central Board of Direct Taxes (CBDT) on Tuesday urged eligible taxpayers to pay their first installment of advance tax by June 15, warning that non-payment or short payment of tax will result in levy of interest.
Advance tax is applicable to assessees including salaried employees, who have tax liability for the financial year after taxes are deducted or collected at sources 10,000 or more, the tax authority said. Resident senior citizens who do not have income from business or profession are not liable to pay advance tax.
The tax authority also said that electronic payment is mandatory for all corporations and assessees whose accounts are required to be audited. The CBDT in a social media post said that e-payment is also convenient for other taxpayers as it ensures correct credit.
Eligible taxpayers will have to pay their tax liability for the year in four advance tax installments in June, September, December and March. While the first installment needs to be only 15% of the tax liability of the entire year, by the March instalment, the taxpayer has to fully meet the tax liability.
Advance tax and tax collected or deducted at source are important parts of the government’s revenue collection exercise as the bulk of direct tax revenue comes from this way. This also makes it easier for the authority to collect taxes. TDS and TCS obligations help the tax authority to oversee the economic activities. From July 1, two more TDS provisions under Section 194R of the Income Tax Act will be applicable- one on virtual digital assets and the other on profits given by businesses as part of their sales promotion efforts. Both the provisions were introduced in the Finance Act of 2022. Government’s goal 14.2 trillion in direct tax receipts in FY23.