These Provisions are applicable From Financial year 2016-17, for year up to 2015-16 click here
- What is Advance Tax
- Applicability of Advance Tax
- Due Date for payment of Advance Tax
- Calculation and Payment of Advance Tax
- Notice by Assessing officer
What is Advance Tax
Income Tax Act requires to deposit income tax on an estimated basis even before the completion of financial year. This tax is called Advance Tax which is nothing but income tax paid before completion of financial year.
Applicability of Advance Tax
Advance tax is payable in case where the amount of tax payable in respect of such financial year is Rs. 10,000 or more.
Resident individuals who are over 60 years of age and do not have income chargeable under the head ‘Profits and Gains of Business or Profession’ are not required to pay advance tax. You can calculate your age as per income tax from this Income Tax Age Calculator
Due Date for payment of Advance Tax
In case of assessee opting for presumptive business income under section 44AD, due date to pay entire amount of advance tax in one instalment is 15th March of the financial year.
Due dates for all other assessee including those covered under section 44ADA (presumptive taxation on individuals) are
|Due Date||Amount Payable|
|15th June 2016||15% of advance tax.|
|15th September 2016||45% of advance tax as reduced by the amount paid in the earlier instalment.|
|15th December 2016||75% of advance tax as reduced by the amount paid in the earlier instalments.|
|15th March 2016||100% of advance tax as reduced by the amount paid in the earlier instalments.|
Calculation and Payment of Advance Tax
First estimate the Total Income for the year
|Calculation of Advance Tax|
|Tax on such estimated income as per applicable rates||A|
|Less: TDS Deducted/Deductible||B|
|Less: TCS Collected/Collectible from assessee||C|
|Advance Tax (D)||A -B -C|
|Advance Tax Instalment Payable|
|Percentage defined for instalment (15 or 45 or 75 or 100)||E|
|Advance Tax already paid in earlier instalments for the year||F|
|Advance Tax Instalment Payable||D*E – F|
Deduction under Chapter VIA are allowable while computing liability of advance tax.
If a person who has already paid one or more instalments revises his estimate of current income, he may reduce or increase his remaining instalments on basis of revised current income.
Any amount paid by way of advance tax on or before 31st March shall also be treated as advance tax paid during financial year ending on that day.
Payment is made by Challan No/ITS 280.
If advance tax is not paid till due date then interest is payable as calculated under section 234C.
Notice by Assessing officer
- Where the assesse is required to pay advance tax on order of assessing officer by virtue of sec 210(3) – Higher of the following is taken as the total income
- the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment
- the total income returned by the assessee in any return of income furnished by him for any subsequent previous year
- If the assessing officer has opinion that an assessee is liable to pay advance tax, then he can issue notice of demand u/s 156 specifying the instalment(s) to be paid by assessee. Provided that such notice can not be issued after the last day of February. Also this provision is applicable to a person who has been already assessed by way of regular assessment in respect of the total income of any previous year.
- If after making an order by A.O u/s 210(3), but on or before last day of February
- Return of income is furnished u/s 139
- Return is furnished in response to notice u/s 142(1)
- Regular assessment is made in respect of year later than referred in subsection 3.
Assessing officer may make an amended order u/s 156 requiring the assessee to pay advance tax on each due date(s) falling after such amended order.
- A person who is served order, estimates that the amount of advance tax would be less than the amount specified in such order, may send an intimation to A.O in the prescribed form to that effect and can pay advance tax according to his own estimate.
- A person who is served order, estimates that the amount of advance tax would be more than the amount specified in such order or amended order or intimated by him is required to pay on or before last day of instalments u/s 211 such higher amount of advance tax.
Advance Tax up to Financial Year 2015-16
There are two changes for Financial year up to 2015-16 from above provisions-
- Due date and percentage of advance tax to be paid is different
|Due Date||For all companies||For all other assessees|
|15th June||15% of the advance tax||Not Applicable|
|15th September||45% of the advance tax||30% of the advance tax|
|15th December||75% of the advance tax||60% of the advance tax|
|15th March||100% of the advance tax||100% of the advance tax|
- Persons filing return under section 44AD i.e tax on presumptive basis are not required to pay advance tax at all.