Every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”.

By on 13-11-2018

PROVISIONS RELATING TO PAYMENT OF ADVANCE TAX

LIABILITY TO PAY ADVANCE TAX

As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”.

 PERSON NOT LIABLE TO PAY ADVANCE TAX

 As discussed above, every person whose estimated tax liability for the year is Rs. 10,000 or more is liable to pay advance tax. However, following persons are not liable to pay advance tax even if their tax liability is Rs. 10,000 or more:

 PERSON NOT LIABLE TO PAY ADVANCE TAX

•  A taxpayer opting for the presumptive taxation scheme of section 44AD will not be liable to pay advance tax in respect of business for which the presumptive taxation scheme of section 44AD is adopted. 
• A resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax.

 DUE DATES FOR PAYMENT OF ADVANCE TAX

 Advance tax is to be paid in different instalments. The due dates for payment of different instalments of advance tax are as follows: 
Due date of installment Amount payable
On or before 15th September Not less than 30% of the advance tax liability
On or before 15th December Not less than 60% of the advance tax liability
On or before 15th March 100% of the advance tax liability

Payment of advance tax: Companies

Due date of installment Amount payable
On or before 15th June Not less than 15% of the advance tax liability
On or before 15th September Not less than 45% of the advance tax liability
On or before 15th December Not less than 75% of the advance tax liability
On or before 15th March 100% of the advance tax liability

 MODE OF PAYMENT OF ADVANCE TAX

 As per Rule 125 of the Income-tax Rules, 1962 a corporate taxpayer (i.e., a company) shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks. Taxpayers other than a company, who are required to get their accounts audited, shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks. Any other taxpayer can pay tax either by electronic mode or by physical mode i.e. by depositing the challan at the receiving bank.

 PAYMENT OF ADVANCE TAX

 Advance tax can be paid by the taxpayer either on his own account or in pursuance of an order of the Assessing Officer. The taxpayer who is liable to pay advance tax is required to estimate his current income and pay advance tax on his own account. In such a case, he is not required to submit any estimate or statement of income to the tax authorities. After making payment of first or second instalment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining instalment(s) and pay the tax as per revised estimates. Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. From the tax so computed, tax deducted or collected at source will be deducted and the balance tax payable will be used to compute the advance tax liability. Also, relief of tax allowed under section 90 or section 90A or any deduction under section 91 or any tax credit allowed to be set off as per section 115JAA or section 115JD shall also be deducted while computing the advance tax liability.