Advance Tax

ADVANCE TAX {Section 208}: All kinds of incomes are liable for payment of advance tax with effect from assessment year 1989-90. Assessed amount of tax payable by the assessee is payable in the previous year itself, if the net amount of tax payable after tax deducted at source or collected at source is Rs.10, 000/- or more.

IMPORTANT NOTES:

1.       A senior citizen (i.e., a resident individual who is at least 60 years of age at any time during the financial year) not having any income from business / profession, is not liable to pay advance tax w.e.f. financial year 2012-13 (i.e., the assessment year 2013-14 onwards).

2.       If the last day for payment of any instalments of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable under sections 234B and 234C would not be charged.

3.       The amount of advance tax payable by an assessee in the financial year on his own account shall be computed as follows:

	Estimate tax payable on Estimated Current Income of the year for which Advance Tax is payable	**
Less:	The tax likely to be deducted at source or collected at source.	**
	Amount of Advance Tax payable (if the amount is Rs.10, 000/- or more).	**

DUE DATES OF PAYMENT OF ADVANCE TAX:

	For corporate Assessee	For Non-Corporate Assessee
On or before June 15 of the relevant previous year.	Upto 15% of advance tax payable	Nil
On or before September 15 of the relevant previous year.	Upto 45% of advance tax payable	Upto 30% of advance tax payable
On or before December 15 of the relevant previous year.	Upto 75% of advance tax payable	Upto 60% of advance tax payable
On or before March 15 of the relevant previous year.	Upto 100% of advance tax payable	Upto 100% of advance tax payable

EXCEPTION: There is a possibility that unexpected casual income (lottery, horse race, etc) or capital gain may arise in the hands of the assessee after 15^th March but before 31^st March of a relevant previous year. In these circumstances, the amount of tax payable for the year may exceed the amount of tax deposited till 15^th March, than the assessee will have to pay the different amount within 31^st March of the same relevant previous year, and such payment of tax will also be considered as advance tax paid, but subject to interest @1% towards the said difference amount if deposited between 16^th March to 31^st March under section 234C.

This Article has been posted by CA Prashant Doshi. He Can be reached at prashantdoshi22@gmail.com