Advance Tax Payment

By | July 1, 2015

All tax payer, for any financial year in respect to current income which would be chargeable to tax and the tax payable in respect of such income is in excess of Rs. 10,000 in respect of are liable to pay the advance tax for such assessment year or an assessee who is In receipt of order passed by the Assessing Officer under section 210 are liable to pay the advance tax within dues dates. The advance tax needs to pay in accordance with provisions of section 208 to 219 of Income Tax Act 1961.

Section 207 of the Income Tax Act 1961 provide relief to Senior Citizen from payment of advance tax on satisfying below mention conditions

  1. (S) He should be resident of India and
  2. Does not have any income under the head ‘Income/Gains from Business & Profession’.

Senior citizen means an individual who is of 60 years or more at any time during the year.

Where the calculation is made by the assessee for the purposes of payment of advance tax, he shall first estimate his current income and income-tax thereon shall be calculated at the rates in force in the financial year;

Where the tax payer is required to pay advance tax,  Assessing Officer will calculate the current income by virtue of sec 210(3) and higher of the following is taken as the total income

  1. the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment
  2. the total income returned by the assessee in any return of income furnished by him for any subsequent previous year

and the tax calculated using applicable tax rates is taken as advance tax.

After determination of tax liability, If there is any amount of TDS deductible or TCS collectible from assessee then such TDS or TCS is to be reduced from the amount of such tax. Provided that the income from which TDS or TCS is to be made is included in the current income or total income from which advance tax is calculated (If the person responsible for deducting or collecting tax doesn’t do so, then such TDS or TCS is not deductible for calculating advance tax).

A tax payer who pays any installment or installments of advance tax under sub-section (1) of section 210, may increase or reduce the amount of advance tax payable in the remaining installment or installments to accord with his estimate of his current income and the advance tax payable thereon, and make payment of the said amount in the remaining installment or installments accordingly.

A tax payer who is required to pay advance tax on the basis of own calculation or as directed by assessing officer fails to do so, he shall be deemed to be an assessee in default in respect of such installment or installments.

Section 211 of the income Tax Act 1961 defines the due dates for payment of advance tax. Those due dates are as follows;

(a) all the companies, who are liable to pay the same, in four installments during each financial year and the due date of each installment and the amount of such installment shall be as specified as below :

Due date of installment
Amount payable
On or before the 15th June Not less than 15% of such advance tax.
On or before the 15th September Not less than 45% of such advance tax, as reduced by the amount, if any, paid in the earlier installment.
On or before the 15th December Not less than 75% of such advance tax, as reduced by the amount or amounts, if any, paid in the earlier installment or installments.
On or before the 15th March The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments;

(b) all the tax payers (other than companies), who are liable to pay the same, in three installments during each financial year and the due date of each installment and the amount of such installment shall be as specified as below :

Due date of installment
Amount payable
On or before the 15th September Not less than 30% of such advance tax.
On or before the 15th December Not less than 60% of such advance tax, as reduced by the amount, if any, paid in the earlier installment.
On or before the 15th March The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments :

Note: Any amount paid by way of advance tax on or before the 31st day of March shall also be treated as advance tax paid during the financial year ending on that day for all the purposes of this Act.

In case where any order issued by Assessing Officer under section 210 to pay advance tax is served after any of the due dates as specified above, the appropriate part or, as the case may be, the whole of the amount of the advance tax specified in such notice shall be payable on or before each of such of those dates as fall after the date of service of the notice of demand.

Penal Provisions

  1. As per section 215, Where, in any financial year the advance tax paid by the tax payer is less than 75% of such advance tax liability then simple interest @ 1.25% per month shall be payable from the 1st day of April next following the said financial year up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short. For companies the interest provision attract when the advance tax paid is less than 83.33% of advance tax liability.
  2. As per section 216, where during regular assessment if the Assessing Officer finds that assessee has under estimated current income or deferred the advance tax, he may direct that the assessee shall pay simple interest @ 15% per annum.
  3. As per section 217, where during regular assessment if the Assessing Officer finds that assessee has failed to estimate income, he may direct that the assessee shall pay simple interest @ 15% per annum.
  4. As per section 234B, an assessee who is liable to pay advance tax has failed to pay such tax or, where the advance tax paid by such assessee is less than 90% of the assessed tax, the assessee shall be liable to pay simple interest @ 1% for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of actual payment of such tax.
  5. As per section 234C, an assessee who is liable to pay advance and such advance is less than the amount so define as per section 211 (see above) is liable to pay simple interest on such shortfall. The interest so payable will be calculated as follow;
  • all the companies
Due date of installment
Advance tax Interest
15th June 15% 3% on the shortfall
15th September 45% 3% on the shortfall
15th December 75% 3% on the shortfall
15th March 100% 1% on the shortfall
  • all the tax payers (other than companies)
Due date of installment
Advance tax Interest
15th September 30% 3% on the shortfall
15th December 60% 3% on the shortfall
15th March 100% 1% on the shortfall

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One thought on “Advance Tax Payment

  1. G K AGRAWAL

    nicely explained
    i am not very clear whether senior citizens having income from pension, interest on deposits, capital gains from investment in index based fixed maturity plans, but no income from trade, business are required to pay advance tax 15 % by 15 June. or 15 Sept- 30%, 15 Dec – 30% and 15 March 40%? Pl clarify Thanks and regards

    Reply

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