Parag Kukreja

Parag Kukreja

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 u/h Business or Profession shall be exempt from the Payment of Advance Tax.

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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 have opted for Presumption taxation scheme for Business (Covered u/s 44AD) 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 shall pay advance Tax in Single Instalment by 31st March equal to 100% of Tax Payable by them. However the Presumptive Tax Payers Covered u/s 44AE and 44ADA shall Pay Advance Tax in accordance with Installments given above.

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 Default in each Installment** For Non-Payment of Advance Tax on or before the Due Date
2 234 B 1% per month or part of a month from 1st April of Assessment Year upto the Date of Payment* For payment of Tax in Assessment Year
3 234 A 1% per month or part of a month for the period beyond the due date of filing return of income For payment of tax beyond the due date of filing return of income.

* If 12% of Tax Liability has been paid upto 15th June and 36% of Tax Liability has been paid upto 15th September 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.

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8 responses to “Advance tax under Income Tax Act, 1961 (Pay as you earn scheme)”

  1. happy says:

    by mistake advance tax dauble deposite
    how to refund ?

  2. ksundar says:

    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

  3. CA Sravan says:

    The due dates given above are applicable for assessees otherthan Individual and HUF.

  4. PARAG KUKREJA says:

    THE RATES OF ADVANCE TAX ARE SAME FOR INDIVIDUALS AND CORPORATE TAXPAYERS FROM FINANCIAL YEAR 2016-17 ONWARDS. EARLIER, IT WAS DIFFERENT.

  5. NIKET NAIK says:

    Rate of advance tax payable for Individual and Corporate is different.

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