Advance Tax Deposit Last Date for Third Installment

If the Income Tax Liability of any taxpayer is more than Rs. 10,000 in a financial year, then he is liable to pay such tax in installments during the year itself rather than paying this tax at the end of the year. This tax which is payable during the year is called “Advance Tax” or “pay as you earn tax” as tax is liable to be paid at the time the income is earned i.e. during the year rather than paying this tax at the end of the year.

For Individuals earning only Salary Income as the sole source of income, Advance Tax is not applicable as it would be taken care of by the TDS deducted by the employer at the time of payment of salaries as reflected in Form 16. 

For all taxpayers earning income from any source other than salary, Advance Tax is payable in installments as explained below.

The due dates and the percentage of installments of Advance Tax for assessees other than Companies are as below

Due Date of instalments	Amount payable
1st on or before 15th September.	Amount not less than 30% of such advance tax.
2nd on or before 15th December.	Amount not less than 60% of such advance tax after deducting amount paid in earlier installment.
3rd on or before 15th March.	Entire balance amount of such advance tax.

In case of companies, there are 4 instalments of advance tax payable on or before 15th June (15%); 15th Sept. (45%); 15th Dec. (75%); & balance amount of Advance Tax payable by 15th March. Also, any amount paid by way of Advance Tax on or before the 31st March of that year, is treated as Advance Tax Paid during that Financial Year. The percentages of 45% and 75% specified with reference to dates of 15th Sept. and 15th Dec. include the amount of advance tax paid earlier during the year.

Interest on Late Payment of Advance Tax:

If the Income Tax is not payable as per the above schedule, Interest is liable to be paid for late payment of tax as follows

1.     Interest under section 234C – Interest @ 1% per month is payable if the tax is not paid as per the above schedule i.e. for Deferment in Installments of Advance Tax

2.     Interest under section 234B – Interest @ 1% is payable if 90% of the tax is not paid before the end of the financial year i.e. for Default in Payment of Advance Tax

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CBDT Extends Due Date For Paying Advance-tax To 18.03.2014

March 15th, 2014

The final instalment of Advance tax for Financial Year 2013-14 is required to be paid on or before 15th March, 2014 by the tax payers who are liable to pay advance tax. These taxpayers can make payments in the designated branches of the authorized banks, electronically or physically, as per law. The banks are open for half day on 15th March, 2014, being a Saturday. Accordingly, to facilitate payment of this instalment of Advance tax for the Financial Year 2013-14, the Central Board of Direct taxes (CBDT) has issued an order to extend the time limit to make such payments of Advance Tax, from 15th March, 2014 to 18th March, 2014. Taxpayers, therefore, can now pay their advance tax instalment by 18th March, 2014 without entailing any consequential interest for deferment.

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Last date for advance tax payments extended to December 17

NEW DELHI: The government on Friday extended the last date for payment of the December instalment of advance tax from December 15 to December 17.

"The banks are closed on December 15, 2013, being a Sunday. Accordingly, to facilitate payment of this instalment of Advance tax, the Central Board of Direct taxes ( CBDT) has issued an order to extend the time limit to make such payments from December 15, 2013 to December 17, 2013," the finance ministry said.

Taxpayers, therefore, can now pay their advance tax instalment by December 17, 2013 without entailing any consequential interest for deferment, it added. (TOI)

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SOME TAX TIPS FOR THE LAST QUARTER ENDED OF YEAR 2013

Tax time may not be right around the corner, but the last quarter of the year is here, so it’s time to get in gear to maximize the potential for tax deductions as the year draws to a close.If you plan your finances carefully and take a look ahead at your income and the tax code for the 2013 year, you could position yourself for some savings come April 15. None of these tips are any substitute for a conversation with a reputable tax lawyer, but it may help make the most of your income and reduce what you owe.

Plan your charitable donations now
If charitable giving is part of your tax plan, don’t wait until the busy month of December to start making end-of-year contributions or at least making decisions about amounts to allocate and to whom.

Increase retirement account contributions
Another way to lower your taxable income is to pay more into your retirement plan if you’re not already maxed out. Ratchet up your 401(k) or IRA contributions to save on taxes owed and boost your retirement security at the same time. .

Spend down flexible spending accounts
If you’re in a pre-tax flexible spending program through your employer, check your balance and spend the amount down between now and the end of the year, if possible. Some eligible expenses may include eyewear, medical devices, and even co-payments and deductibles.

Sell off losing stocks
If you have stocks that are worth less than what you paid for them, and you don’t want to hang onto them, you can sell them and take a capital loss on your tax return. While selling the stocks in order to be able to declare the loss on your tax return might only make up for a small percentage of the loss, you can claim up to $3,000 annually. Naturally, there is additional paperwork involved, but if you’ve been looking for a reason to let go of some losers, now could be a good time. '

Go green
There is still time left to upgrade to energy-efficient appliances and reap up to a $500 tax credit. This credit was set to expire in 2011, but was extended through the end of this year. If you haven’t taken the credit before, some items which may be eligible include water heaters, furnaces, heat pumps, central air conditioners, boilers, and even building Insulation, windows, and a new roof. In a qualifying furnace, circulating fans installed may also count, as well as other renewable or alternative technologies such as biomass burners of stoves that use qualified biomass fuel.
Other credits have been extended as well.

Have a plan and know the rules
This is not a comprehensive list of tax deductions or credits, so spend some time at IRS.gov to learn more about qualifying expenses and eligible purchases, contributions, and gifts. Do a quick run-through of your income and expected deductions to determine what you'll owe, and if there are sound ways to act now and reduce your tax burden.In general, there is some good news about changes to the tax bracket structure this year. The standard deduction will increase slightly with inflation, and tax brackets have changed.

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Paying over R100-cr advance tax may be asked to join LTU

The government is considering making it mandatory for companies paying advance tax of over R10 crore annually to register with the Large Taxpayers Unit (LTU), a move likely to augment and streamline tax collection.

A four-member committee has been set up to look into various aspects of LTU, a single-window clearance for all matters related to central excise, income tax/ corporate tax and service tax.

“The committee is also examining whether to make it mandatory for companies who are paying advance tax of more than R10 crore in a fiscal year or service tax of more R5 crore to register under LTU,” said a senior finance ministry official.

At present, it is voluntary for large taxpayers to register under LTU. The first LTU was set up at Bangalore in 2006 followed by Chennai, Mumbai and Delhi. As a measure of facilitation, and in line with international practices, the government announced the setting up of LTUs in 2005-06.

LTUs, as per the finance ministry, provide better service to the taxpayer, through personalised attention, quality of service and transparency in transactions. These units reduce tax compliance cost, delays and ensure uniformity in the matters of tax/duty determination.

An LTU is headed by a chief commissioner, either from the Central Board of Direct Taxes (CBDT) or the Central Board of Excise and Customs (CBEC).

The government has set a R12.35-lakh-crore total tax

Revenue target (direct and indirect taxes) for the current fiscal, up from R10.38 lakh crore estimated in the previous fiscal.

Last month, Parthasarathi Shame finance minister P Chidambaram, had hinted that at one point the government might make LTUs mandatory for eligible entities.

This Article is written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com

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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

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