Under the Income-tax Act, 2025, a taxpayer who receives an advance-tax demand and believes the amount is incorrect now has a prescribed electronic response mechanism through Form 152. The Income Tax Department’s current Form 152 utility states that it is used to respond where an order under section 289 has been issued in relation to advance tax under section 407(2) or 407(5).

The form allows the taxpayer to provide the estimated income position, including business/professional income, other-source income, eligible losses or deductions, TDS information and the resulting balance tax payable. Supporting documents substantiating why the departmental computation is incorrect can also be attached.

Business impact

For businesses whose profits fluctuate significantly during the year, advance-tax disputes should therefore be supported by a documented management estimate of income, rather than merely a disagreement with the amount appearing in the demand.

Finance teams should preserve the assumptions behind forecasts, TDS positions, losses and significant income changes so that the tax position can be substantiated if Form 152 becomes necessary.

Mardia Global | Tax, Accounting & Regulatory Insights