Advance Tax

advance tax
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Last updated on July 29th, 2022 at 08:19 pm

Advance Tax

Collection from direct and indirect taxes is the major source of revenue for the Government. Any government needs to earn revenue for the smooth functioning of the nation just like we need funds/income for the smooth functioning of our livelihood.  Like we earn income regularly (installments) and not lumpsum, taxes should also be paid regularly in installments and not lumpsum payment.

 

Advance tax

(Section 208 of Income Tax Act 1961)

If your estimated tax liability exceeds Rs 10,000/- you are required to pay advance tax in different installments before the predetermined due dates. While calculating the estimated liability taxpayer shall take into consideration deductions u/s 80, rebate u/s 87A, and tax deducted at source.

 

Are senior citizens liable for payment of advance tax?

Resident senior citizens not having business income are exempted from paying advance tax even if the tax liability is exceeding Rs 10,000/-.

 

Are NRI & RNOR liable for payment of advance tax?

Provisions of section 208 are also applicable to RNOR and NRI for the income earned in India. 

 

What is the due date of advance tax?|What is the percentage of tax to be deposited in advance? 

Installment

% of tax to be paid in advance   Due Date
1st 15%

15th June

2nd

45% 15th September
3rd 75%

15th December

4th

100%

15th March

Note: Any tax paid up to 31st March of the financial year will be treated as advance tax.

Note: Taxpayers opting for the presumptive taxation scheme under section 44AD or section 44ADA have to pay the whole amount of tax in advance up to 15th March of the financial year.

 

Which form is to be used for payment of tax in advance?

Challan No. ITNS 280 is the form to be used for payment of tax in advance. Taxpayers should be careful while providing the details of PAN, assessment year, and selecting the type of payment.

 

Is there any penalty for failure in payment/short payment of advance tax on due dates?

Yes, if you miss paying tax within the prescribed due dates or there is a shortfall from the prescribed percentage of tax to be paid then interest u/s 234B and 234C will be levied. 



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About CA Ankita Khetan 196 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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