People with total tax liability of Rs 10,000 or more in a year need to pay advance tax.
The income tax department has launched an electronic campaign for taxpayers who have carried out significant transactions in the current financial year. Such taxpayers will be informed through email and SMS, with the department urging them to deposit their due advance tax on or before March 15, 2024. The campaign was started after the income tax department identified individuals and entities with discrepancies between transactions carried out and the tax deposited. The department said that the aim of this campaign is to encourage such taxpayers to deposit the “right” amount as tax.
“The Income Tax Department has received certain information on specific financial transactions undertaken by persons or entities during the financial year 2023-24. On the basis of an analysis of the taxes paid so far during the current financial year, the Department has identified persons /entities whose payment of taxes for FY 2023-24 (A.Y. 2024-25) is not commensurate with the financial transactions made by the persons/entities concerned, during the said period,” the income tax department said in a release on Sunday.
The department receives information of specified financial transactions of taxpayers from various sources. To increase transparency and to promote voluntary tax compliance, this information is reflected in the Annual Information Statement (AIS) and is available to the persons/entities for viewing. Officials said that the value of ‘Significant Transactions’ in the AIS has been used for carrying out this analysis.
What is advance tax?
It is the income tax that is paid in advance instead of lump sum payment. In other words, it is the tax that individuals pay as they earn. These payments have to be made in instalments as per due dates provided by the income tax department.
Who needs to pay advance tax?
Salaried individuals, freelancers and businesses with a total tax liability of Rs 10,000 or more in a year need to pay advance tax. In case of senior citizens (people aged 60 or more), and do not run a business, are exempt from paying advance tax. This is applicable only to those who have business income.
Further, taxpayers who have opted for the presumptive taxation scheme under Section 44AD have to pay the whole amount of their advance tax.
