As per the provisions of the Section 207 of the Income Tax Act,1961, Every Assessee shall estimate his Income and Tax Liability for any previous year and Income Tax So Estimated shall be paid in advance in accordance with the manner given u/s 211 of the Income Tax Act,1961.
Liability of a Person to pay Advance Tax (Section 208): A Person Shall be liable to pay advance tax only if Tax Liability exceeds Rs. 10,000 i.e. a person shall be exempt from payment of Advance Tax If Tax Liability does not exceed Rs. 10,000.00. The Education Cess and Secondary Higher Education cess shall also be considered for the purpose of calculating the Tax Liability.
A Senior Citizen who do not have Income under head Business or Profession shall be exempt from the Payment of Advance Tax.
Due Dates for Payment of Advance Tax (Section 211): The Advance Tax shall be paid by the Individuals and Corporate Tax Payers other than tax payers who has opted for Presumptive taxation scheme for Business or Profession Covered u/s 44AD or u/s 44ADA respectively on or before the following Due Dates:
| Due Date for Payment of Advance Tax | Advance Tax Payable |
| On or Before 15th June | 15% of Tax Payable |
| On or Before 15th September | 45% of Tax Payable |
| On or Before 15th December | 75% of Tax Payable |
| On or Before 15th March | 100% of Tax Payable |
The Tax Payers who Have opted for Presumptive Taxation Scheme for Business or Profession shall pay advance Tax in Single Installment by 15th March to the extent of the whole amount of Tax Payable by them.
Note:-
1. 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.
2. The Amount of Advance Tax Shall get reduced by the Amount of TDS if any Deducted or any tax Paid earlier by the Assessee.
Interest for default in payment of Advance Tax
| S.No. | Interest under Section | Rate of Interest | Why Charged? |
| 1 | 234 C | 1% per month for a period of 3 months (1 Month in case of Last Installment) on the amount of Shortfall in each Installment** | For shortfall/ failure to pay advance tax or Deferment of advance tax |
| 2 | 234 B | 1% per month or part of a month from 1st April of Assessment Year to the date of determination of income u/s 143(1) or date of regular assessment if such assessment is made* | For default in payment of Advance Tax in Assessment Year (i.e. if Advance tax is less that 90% of total tax liability) |
| 3 | 234 A | 1% per month or part of a month for the period beyond the due date of filing return of income | For default in furnishing return of income. |
**If 15% of Tax Liability has been paid upto 15th June, 45% of Tax Liability has been paid upto 15th September, 75% of Tax Liability has been paid upto 15th December and 100% of Tax Liability has been paid upto 15th March then the Interest u/s 234C shall not be charged on such Default.
*The Interest Under Section 234B shall not be Charged if Advance Tax Paid by the Assessee is 90% or more of the Actual Tax Liability of the Assessee.
Capital Gains or Casual Income After 15th March: IF any Assessee has Capital Gains or Casual Income After 15th March, then Assessee should pay tax on Such Income upto 31st March of that Previous Year to Avoid Interest us/ 234C and 234B.
If the tax liability gets reduced after 10E relief.
234B & C applicable?
Department started sending notices to such assesses for 234B & C demands
by mistake advance tax dauble deposite
how to refund ?
Income tax dept.guidelines shows no need for advance tax instalments for 44ADA category under PTS.
Check here: http://www.incometaxindia.gov.in/tutorials/31.%20provisions%20on%20pymt%20of%20adv.%20tax.pdf
The due dates given above are applicable for assessees otherthan Individual and HUF.
THE RATES OF ADVANCE TAX ARE SAME FOR INDIVIDUALS AND CORPORATE TAXPAYERS FROM FINANCIAL YEAR 2016-17 ONWARDS. EARLIER, IT WAS DIFFERENT.
Rate of advance tax payable for Individual and Corporate is different.