Pay Advance Tax Timely

By | June 8, 2016
(Last Updated On: June 8, 2016)

Pay Advance Tax on your Income

Advance Tax

When you have to Pay Advance Tax ?

In case your tax liability after reducing the amount of TDS exceeds Rs. 10,000/- in a year, you are liable to pay advance tax.

What are Advance Tax Due Dates ?

As per Changes made by Finance Act 2016 :-

  1. Now Whether Corporate or non Corporate Assessee (Except Assessee to whom section 44AD applies as per point 2 below ) are required to pay tax in 4 Installments . on or before 15th June ,15th September,15th December ,15th March
  2. Assessee to whom Section 44AD applies (people engaged in any business and who have opted for paying tax on assumed profit @ 8% on their gross turnover upto Rs. 2 Crore) are also required to pay Advance Tax on or before 15th March .In case of Default , interest for default and deferment of advance tax under Section 234B and Section 234C respectively, shall also be levied.

How much You have to Pay Advance Tax ?

Example : in case your  estimated advance tax liability comes to Rs. 1 lacs for the whole FY 2016-17 i.e  from 01.4.2016 to 31.03.2017 then  you have to pay the first instalment of Rs. 15,000/- due on 15th June. ( 15% of Rs 1 Lakh)

 

(1) Advance tax on the current income calculated in the manner laid down in section 209 shall be payable by—

a) all the assessees, other than the assessee referred to in clause (b), who are liable to pay the same, in four instalments during each financial year and the due date of each instalment and the amount of such instalment shall be as specified in the Table below

TABLE

Due date of instalment                                       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                                                                                               instalment.

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 instalment or instalments

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 instalment                                                                                or instalments;

b) an eligible assessee in respect of an eligible business referred to in section 44AD, to the extent of the whole amount of such advance tax during each financial year on or before the 15th March

Provided that 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.”.

Interest for defaults in payment of advance tax.

As per Section 234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shallbe liable to pay simple interest at the rate of one per cent 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 determination of total income under sub-section (1) of section 14 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.

Interest for deferment of advance tax.

As per Section 234C

  • Where in any financial year,—

 (a)         an assessee, other than an eligible assessee in respect of the eligible business referred to in section 44AD, who is liable to pay advance tax under section 208 has failed to pay such tax or—

(i)           the advance tax paid by such assessee on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the assessee shall  be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income;

(ii)          the advance tax paid by the assessee on the current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income:

               Provided that if the advance tax paid by the assessee on the current income, on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, the assessee shall not be liable to pay any interest on the amount of the shortfall on those dates;

 (b)    an eligible assessee in respect of the eligible business referred to in section 44AD, who is liable to pay advance tax under section 208 has failed to pay such tax or the advance tax paid by the assessee on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income:

Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate—

(a)           the amount of capital gains; or

(b)           income of the nature referred to in sub-clause (ix) of clause (24) of section 2; or

(c)    income under the head “Profits and gains of business or profession” in cases where the income accrues or arises under the said head for the first time,

and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (bor clause (c, as the case may be, had such income been a part of the total income, as part of the remaining instalments of advance tax which are due or where no such instalments are due, by the 31st day of March of the financial year:

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