Department of Tax Procedure Practices

Tax Procedure And Practice Freshers Can Take Up Careers In Accounting, Revenue Agent, Or Employment Tax Specialist. Graduates Can Also Choose To Pursue Careers As Marketing Managers, Tax Attorneys, And Tax Examiners.

Tax procedures in commerce involve the systematic processes of recording, calculating, and remitting taxes to the government by individuals and business entities. In India, these procedures are primarily governed by the Central Board of Direct Taxes (CBDT) for direct taxes and the Central Board of Indirect Taxes and Customs (CBIC) for indirect taxes. 

1. Key Business Registrations

• Permanent Account Number (PAN): A mandatory unique 10-digit alphanumeric ID required for all financial transactions and filing income tax returns.
• Tax Deduction and Collection Account Number (TAN): Required for entities that must deduct tax at source (TDS) from payments such as salaries or contractor fees.
• GST Registration: Mandatory for businesses with an annual turnover exceeding ?40 lakhs for goods (?20 lakhs in some states) or ?20 lakhs for service providers. 

2. Direct Tax Procedures

Direct taxes are paid directly by the business on its income or profits and cannot be shifted to another party. 

• Income Tax Returns (ITR): Businesses must file annual returns. The due dates are typically July 31 for non-audit cases and September 30 (or October 31) for companies requiring an audit.
• Advance Tax: If the estimated tax liability for a financial year exceeds ?10,000, it must be paid in four instalments (15% by June 15, 45% by Sept 15, 75% by Dec 15, and 100% by March 15).
• Tax Audit: Mandatory under Section 44AB for businesses with a turnover exceeding ?1 crore (or ?10 crore if cash transactions are less than 5%). 

3. Indirect Tax Procedures (GST)

Indirect taxes are levied on the supply of goods and services and are ultimately borne by the consumer. 

• Filing Periodic Returns:
• GSTR-1: Monthly or quarterly details of outward supplies (sales).
• GSTR-3B: A summary return for monthly or quarterly tax payment.
• E-Way Bill: Mandatory for the movement of goods valued above ?50,000.
• Input Tax Credit (ITC): Businesses can claim credit for taxes paid on purchases, which can be used to offset the tax liability on sales, preventing a "tax on tax" effect. 

4. Withholding Tax (TDS/TCS) 

• Tax Deducted at Source (TDS): Businesses must deduct a percentage of tax when making specific payments like rent, professional fees, or salaries, and deposit it by the 7th of the following month.
• Tax Collected at Source (TCS): Sellers (often in e-commerce) collect tax from buyers at the time of sale and remit it to the government. 

5. Digital & 2026 Reforms

• New Income Tax Act 2025: Effective from April 1, 2026, this act aims to simplify reporting and modernise compliance procedures.
• Real-time Compliance: Authorities now emphasize digital paper trails, organized reporting, and proactive correction of errors through formal disclosures.
• Faceless Assessments: Systems for assessments and appeals are now largely digital and faceless to increase transparency and reduce personal interaction.

Dr. Tulsi Das Banjare 

(Exam Controller)