To boost direct tax collection, India's Central Board of Direct Taxes is keeping a tab on advance tax payments by companies and has asked its officials to inspect the second quarter results of top 500 corporate taxpayers, reveals the Economic Times, citing an income-tax department official.
The Times says that the move is aimed at ensuring that companies do not defer tax payments. The official told the Times that companies tend to defer tax payments to show increased revenues and pay the tax due later with a penalty—1% interest for every month of delay.
The last date for payment of the third instalment of advance tax is December 15. Advance tax is paid in four instalments in June, September, December and March, and is based on taxpayers’ projected income, giving an indication of industry’s performance in coming months.