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By:

Abhijit Mulye

21 August 2024 at 11:29:11 am

Fadnavis writes off Rs 48,000 crore

Mumbai: In a clear indication that the Maharashtra government is leaving no stone unturned to keep the state’s agrarian base happy, Chief Minister Devendra Fadnavis has unleashed yet another massive populist measure. Hot on the heels of relaxing the eligibility criteria to ensure a blanket farm loan waiver, the Chief Minister announced a sweeping Rs 48,000 crore waiver on the pending electricity bills of farmers across the state. Addressing a ‘Krutadnyata Sohala’ (gratitude ceremony)...

Fadnavis writes off Rs 48,000 crore

Mumbai: In a clear indication that the Maharashtra government is leaving no stone unturned to keep the state’s agrarian base happy, Chief Minister Devendra Fadnavis has unleashed yet another massive populist measure. Hot on the heels of relaxing the eligibility criteria to ensure a blanket farm loan waiver, the Chief Minister announced a sweeping Rs 48,000 crore waiver on the pending electricity bills of farmers across the state. Addressing a ‘Krutadnyata Sohala’ (gratitude ceremony) organized by the BJP Kisan Morcha at Mumbai’s Yashwantrao Chavan Pratishthan on Wednesday, Fadnavis declared that farmers using agricultural pumps of up to 7.5 horsepower will see their historical electricity dues completely wiped out. The announcement was met with the traditional sounding of the Tutari and thunderous applause from hundreds of farmers who had gathered from every corner of the state. The Chief Minister framed the mega-sop as a necessary step to “wipe the farmers’ slate clean,” enabling them to write a new chapter of prosperity. Calculated Pitch The timing and scale of the announcement underscore a government that is boldly embracing populist economics to solidify its political footprint in rural Maharashtra. While Fadnavis maintained that these decisions were taken purely in the interest of the farmers—pointing out that the original loan waiver was announced when no elections were in sight—the political undertones were unmistakable. Taking a sharp dig at the opposition, the Chief Minister accused rival parties of running “political shops” in the name of farmer agitations without understanding the government’s genuine intent. Asserting his grassroots connection, Fadnavis proudly claimed, “I do not make decisions sitting in my house. I am a farmer myself, a man of the soil.” He openly defended the government’s recent move to strip away the stringent conditions attached to the blanket farm loan waiver, signaling that his administration will not hesitate to clear bureaucratic hurdles if it means putting money directly into the hands of the rural voter. Balancing Sops Even as he rained freebies, the Chief Minister attempted to balance the populist optics with a dose of economic pragmatism. He acknowledged that handing out repeated loan waivers is a symptom of deep-rooted agrarian distress, not a permanent cure. Pointing to the Rs 95,000 crore in aid currently being pumped into the agricultural sector by the state and central governments, Fadnavis outlined his administration’s shift toward an investment-driven agricultural model. He championed the success of schemes like ‘Jalyukt Shivar’ and ‘Magel Tyala Shettale’ (farm ponds on demand), claiming these initiatives have already empowered farmers to harvest multiple crops a year. Addressing the core issue of farming costs, he noted that the government already subsidises power to the tune of Rs 25,000 crore annually. By coupling this with a push for solar pumps and solar agricultural feeders, he promised that 100 percent of the state’s farmers would receive uninterrupted daytime electricity by the end of the year. Infra Dream Looking beyond immediate financial relief, the Chief Minister laid out a grandiose vision to permanently drought-proof Maharashtra’s most vulnerable regions. A staggering Rs 6 lakh crore infrastructure pipeline is being planned to ensure the next generation never witnesses a drought. Fadnavis detailed ambitious river-linking projects, including the Wainganga-Nalganga link, to divert excess floodwaters to parched regions. The state plans to construct 24 new dams and raise the height of 16 existing ones to ensure not a single district in Vidarbha faces water scarcity. Furthermore, massive engineering feats are on the drawing board to divert 200 TMC of floodwater from Western Maharashtra to Marathwada, and lift 275 TMC of wasted water from the Ulhas basin to quench the thirst of North Maharashtra and Marathwada. By marrying immediate, massive debt relief with long-term infrastructure promises, the Fadnavis administration is aggressively cementing its pro-farmer narrative. As the Yashwantrao Chavan auditorium echoed with whistles and cheers, it became highly evident that the government’s strategy of pairing mega populist waivers with big-ticket rural dreams is striking a powerful chord with the state’s agrarian voters.

Advance Tax Non-Compliance Can Lead to Interest Burden

Many taxpayers assume that TDS is sufficient, only to discover additional tax and interest liabilities when filing their returns.

In the minds of many taxpayers, income tax is something that is paid only at the time of filing the income tax return. However, the Income-tax Act contains a concept known as 'advance tax', which requires taxpayers to pay tax during the financial year itself as income is earned. Despite its importance, advance tax remains one of the most overlooked aspects of tax compliance.


Advance tax, often referred to as the "pay-as-you-earn" system, applies when a taxpayer's estimated tax liability for a financial year exceeds the prescribed limit after considering TDS and other available tax credits. The objective is to ensure timely collection of taxes and reduce the burden of paying the entire amount at the end of the year.


A common misconception is that advance tax is relevant only for business owners and large corporations. In reality, salaried employees, professionals, freelancers, investors, and even pensioners may be required to pay advance tax if they earn income from sources where tax is not adequately deducted at source.


Consider the case of Sandeep, a salaried employee working in a private company. His employer regularly deducted TDS from his salary, and therefore he believed that all his tax obligations had already been fulfilled. During the financial year, Sandeep earned substantial profits by selling equity shares that he had invested in over the years. He also received significant interest income from fixed deposits maintained with different banks.


Since sufficient tax had not been deducted on these additional incomes, Sandeep's overall tax liability increased considerably. However, being unaware of the advance tax provisions, he did not make any advance tax payments during the year. At the time of filing his income tax return, he was surprised to learn that he was not only required to pay the balance tax but was also liable to pay interest for non-payment of advance tax. Had Sandeep reviewed his tax position during the year and paid the applicable advance tax on time, he could have avoided the additional financial burden.


This situation is not uncommon. Many taxpayers earn income from capital gains, fixed deposits, rental properties, professional services, or freelance assignments and assume that tax deducted at source is sufficient. As a result, they often overlook their advance tax obligations until the return filing season arrives.


The Income-tax Act prescribes specific due dates for payment of advance tax during the financial year. Taxpayers are expected to estimate their income and discharge their tax liability in instalments. While exact income estimation may not always be possible, a reasonable assessment based on available information can help ensure compliance and reduce the risk of interest liability.


One of the key reasons for non-compliance is a lack of awareness. Taxpayers often focus only on filing their income tax returns and do not realise that tax may be required to be paid much earlier. In some cases, a one-time transaction such as the sale of property, redemption of mutual funds, or receipt of a large professional fee can significantly increase the tax liability and trigger the requirement to pay advance tax.


Another common misconception is that tax can simply be paid at the time of filing the return without any consequences. While the tax can certainly be paid later, failure to pay advance tax when required may result in interest under the provisions of the Income Tax Act. This additional cost can often be avoided through timely planning and regular review of income sources.


From a Chartered Accountant's perspective, advance tax should not be viewed merely as a compliance requirement. It is an important aspect of financial planning and tax management. Periodic review of income, proper estimation of tax liability, and timely payment of taxes can help taxpayers avoid unnecessary interest costs and maintain better control over their finances.


As financial transactions become increasingly transparent and digitally tracked, taxpayers must adopt a proactive approach toward tax compliance. Understanding advance tax obligations and acting on them in a timely manner can prevent last-minute surprises and contribute to sound financial management.


Advance tax is not merely about paying taxes earlier; it is about fulfilling a statutory responsibility while ensuring smooth and efficient tax planning throughout the year.

(The writer is a Chartered Accountant based in Thane. Views personal.)

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