The Bombay Chartered Accountants’ Society (BCAS) in its pre-budget memorandum has pointed out that the threshold limit of Rs. 10,000 was last amended by the Finance Act, 2009. Considering the inflation in the economy, there is a need to increase this limit to a more realistic figure.
Deepak R. Shah, chartered accountant and chairperson of the taxation committee at the BCAS adds, “The requirement to pay advance tax in four instalments (refer graphic), which was only for corporate entities was introduced for non-corporate taxpayers, by the 2016 budget.”
“It is quite difficult for individuals, such as gig-workers who have either not opted for the presumptive tax or are not eligible for it, to estimate the total income and pay an advance tax of 15% by end June, which is a mere 75 days from the commencement of the financial year. The pandemic, which in several sectors has slowed down revenue streams and made income flows erratic, makes income estimation even more difficult. For their default, taxpayers are burdened with interest under section 234C, which stipulates an interest at the rate of one per cent per month on the shortfall, until the next instalment which falls due after three months,” adds Shah.
BCAS has also represented that the requirement to pay 15% advance tax by June 15, should be removed for non-corporate taxpayers.