Today, March 15, 2024, marks the final deadline for taxpayers in India to settle their fourth and final installment of advance tax for the financial year 2023-24. Missing this deadline can result in penalties and interest charges.

Advance tax allows taxpayers to spread out their income tax payments throughout the year, rather than paying a large sum at the end of the financial year. This system ensures a steady flow of tax revenue for the government.

Who Needs to Pay Advance Tax?

Salaried individuals, freelancers, and businesses: If your total tax liability is expected to be more than Rs 10,000 for the financial year, you are required to pay advance tax.

Senior citizens: Those aged 60 and above who do not have business income are exempt. However, senior citizens with business income must pay an advance tax.

Presumptive income taxpayers: Businesses and professionals under the presumptive taxation scheme (sections 44AD and 44ADA) have the option to pay their entire advance tax in one go by March 15th or by March 31st.

How To Pay Advance Income Tax?

Eligible taxpayers are required to make advance income tax payments in four installments throughout the financial year, typically in June, September, December, and March. These payments can be made conveniently online via either the official website of the Income Tax Department (incometaxindia.gov.in) or the National Securities Depository.

Act Now To Avoid Penalties

The Income Tax Department urges all taxpayers to settle their advance tax dues before the deadline.
Failure to do so can lead to interest charges under sections 234B and 234C of the Income Tax Act.

For more information on advance tax and how to calculate your liability, taxpayers can visit the Income Tax Department’s website.

Minister of State for Finance Pankaj Choudhary. File

The number of Hindu Undivided Families (HUFs) availing tax benefits under the Income Tax Act stood at almost 8.76 lakh in 2022-23, the lowest in at least five years. The impact on their tax treatment under a Uniform Civil Code (UCC) has not yet been examined, the Finance Ministry informed Parliament on July 25.

Responding to a query on whether the Government has assessed the impact of Uniform Civil Code on tax benefits to HUFs in the country from Janata Dal MP Ram Nath Thakur, Minister of State for Finance Pankaj Choudhary said there has been no such assessment “as there is no such Code at present.”

Under the Income Tax Act, an HUF is treated as a ‘person’ and is assigned a separate entity for the purpose of assessment. Under Hindu Law, an HUF is a family which consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. Jain and Sikh families, even though they are not governed by the Hindu Law, are also treated as HUFs under the Act.

While there were more than 9.25 lakh HUFs who availed tax benefits in 2020-21, this number dropped to around 8.77 lakh in 2021-22 and further to a little under 8.76 lakh families last year.

A salesman watches TV screens during the live telecast of Union Budget 2023 by Finance Minister Nirmala Sitharaman in Ahmedabad on Wednesday.
| Photo Credit: VIJAY SONEJI

The Union Budget 2023-24 has proposed certain changes to the Income Tax search and seizure provisions in view of the increased use of technology and digitisation in the management and maintenance of accounts, digitisation of data, cloud storage and other associated aspects.

Section 132 of the Income-Tax Act pertains to the procedure for the search and seizure to be followed by the agency.

The document said: “In the recent past, due to the increased use of technology and digitisation in every aspect including management and maintenance of accounts, digitisation of data, cloud storage etc., the procedure for search and seizure has become complex, requiring the use of data forensics, advanced technologies for decoding data etc., for complete and proper analysis of accounts.”

Similarly, “there is an increasing trend of undisclosed income being held in a vast variety of forms of assets or investments in addition to immovable property. Valuation of such assets and decryption of information often require specific domain experts like digital forensic professionals, valuers, archive experts etc. In addition to this, services of other professionals like locksmiths, carpenters etc., are also required in most of the cases, due to typical nature of the operations”.

Accordingly, the government has proposed to amend the relevant provisions of the section to ensure that during the course of I-T searches, the authorised officer may be able to requisition the services of any other person or entity, as approved by the Principal Chief Commissioner or the Chief Commissioner, the Principal Director General or the Director-General, in accordance with the procedure prescribed by the Board in this regard, for assistance during the search.

It has also been proposed that during or post search, the officer may make a reference to any person, entity or authorised valuer to estimate the fair market value of the property in the manner prescribed and submit a report within 60 days from the receipt of reference.

If approved, the amendment will take effect from April 1.

“Consequent to the changes in 2021, the assessment or reassessment in consequence to search is now performed under Section 147 of the Act and provisions of Sections 153A and 153B are no longer applicable. The timelines for completing assessment or reassessment in search cases are linked to the execution of the last of the authorisations during such procedure, in order to establish the day of conclusion of search proceedings, and what constitutes as last authorisation is provided in Section 153B,” it said.

As the provisions of Section 153B are no longer applicable, the government has proposed to provide the meaning of execution of last authorisation under Section 132 itself. “This amendment will take effect retrospectively from the April 1, 2022,” it said.