Govt proposes voluntary reporting of income, tax

Tribune News Service

New Delhi, September 19

The government has proposed to create a mechanism for self-reporting of estimates of current income, tax payments and advance tax liability by certain taxpayers, namely companies and tax audit cases on a voluntary-compliance basis.

The proposed reporting mechanism is sought to be created by way of inserting a new Rule 39A and Form No. 28AA in the Income-tax Rules, 1962.

The proposed draft notification has been placed in public domain on the website of the Income Tax Department for inviting comments from stakeholders and general public.

A taxpayer who is liable to discharge part of its tax liability by way of advance tax has to bear additional burden of interest for default of advance tax, in case total advance tax paid for the year falls short of the assessed tax by 10% or more. This interest is levied as per the provisions of Section 234B of the Income-tax Act, 1961.

Such taxpayers are further liable to pay interest for deferment of advance tax, in case any quarterly instalment of advance tax paid falls short of the prescribed percentage of total advance tax paid.