Home > Income Tax > Advance Tax > Computation of Advance Tax – Sec 209

Computation of Advance Tax – Sec 209

U.C Date : 25 Feb 2015


Where the assessee has to pay advance tax in his own motion (means not by order of assessing officer) – The assessee has to first estimate his total income and then compute tax on such income considering rates applicable to that financial year. Such tax is the advance tax.

  1. 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
    1. the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment
    2. the total income returned by the assessee in any return of income furnished by him for any subsequent previous year

    and the tax calculated using applicable tax rates is taken as advance tax.

  2. Where the Assessing officer amended his order u/s 210(4) – Total income declared in such return or assessed in such regular assessment, as the case may be is taken as total income and tax is calculated using applicable tax rates.
  3. If there is any amount of TDS deductible or TCS collectible from assessee then such TDS or TCS is to be reduced from the amount of such advance tax. Provided that the income from which TDS or TCS is to be made is included in the current income or total income from which advance tax is calculated.(If the person responsible for deducting or collecting tax doesn’t do so, then such TDS or TCS is not deductible for calculating advance tax)

Related Pages to Advance Tax

Related Pages to Advance Tax

Bare Act for Sec 209

Bare Act for Sec 209

[(1) The amount of advance tax payable by an assessee in the financial year shall, subject to the provisions of sub-sections (2) and (3), be computed as follows, namely :—

(a)  where the calculation is made by the assessee for the purposes of payment of advance tax under sub-section (1) or sub-section (2) or sub-section (5) or sub-section (6) of section 210, he shall first estimate his current income and income-tax thereon shall be calculated at the rates in force in the financial year;

(b)  where the calculation is made by the Assessing Officer for the purpose of making an order under sub-section (3) of section 210, the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment or the total income returned by the assessee in any return of income furnished by him for any subsequent previous year, whichever is higher, shall be taken and income-tax thereon shall be calculated at the rates in force in the financial year;

(c)  where the calculation is made by the Assessing Officer for the purpose of making an amended order under sub-section (4) of section 210, the total income declared in the return furnished by the assessee for the later previous year, or, as the case may be, the total income in respect of which the regular assessment, referred to in that sub-section has been made, shall be taken and income-tax thereon shall be calculated at the rates in force in the financial year;

(d)  the income-tax calculated under clause (a) or clause (b) or clause (c) shall, in each case, be reduced by the amount of income-tax which would be deductible [or collectible] at source during the said financial year under any provision of this Act from any income (as computed before allowing any deductions admissible under this Act) which has been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the amount of income-tax as so reduced shall be the advance tax payable:] [Provided that for computing liability for advance tax, income-tax calculated under clause (a) or clause (b) or clause (c) shall not, in each case, be reduced by the aforesaid amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income, if the person responsible for deducting tax has paid or credited such income without deduction of tax or it has been received or debited by the person responsible for collecting tax without collection of such tax.] [(2) Where the Finance Act of the relevant year provides that, in the case of any class of assessees, net agricultural income (as defined in that Act) shall be taken into account for the purposes of computing advance tax, then, the net agricultural income to be taken into account in the case of any assessee falling in that class, shall be—

(a)  in cases [where the Assessing Officer makes an order under sub-section (3) or sub-section (4) of section 210],—

(i)  if the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment forms the basis of computation of advance tax payable by him, the net agricultural income which has been taken into account for the purposes of charging income-tax for the assessment year relevant to that previous year; or

[(ii) if the total income declared by the assessee for the later previous year referred to in sub-section (4) of section 210 forms the basis of computation of advance tax, the net agricultural income as returned by the assessee in the return of income for the assessment year relevant to such later previous year;] [(b) in cases where the advance tax is paid by the assessee on the basis of his estimate of his current income under sub-section (1) or sub-section (2) or sub-section (5) or sub-section (6) of section 210, the net agricultural income, as estimated by him, of the period which would be the previous year for the immediately following assessment year.]

(3) Where the Finance Act of the relevant year specifies any separate rate or rates for the purposes of computing advance tax in the case of every Hindu undivided family which has at least one member whose total income of the previous year exceeds the maximum amount not chargeable to income-tax in his case, then, the [Assessing] Officer shall, for making an order under [sub-section (3) or sub-section (4) of] section 210 in the case of any such Hindu undivided family, compute (subject to the provisions of section 164) the advance tax at such rate or rates—

(a) in a case where the total income of the latest previous year in respect of which the Hindu undivided family has been assessed by way of regular assessment forms the basis of computation of advance tax, if the total income of any member of the family for the assessment year relevant to such latest previous year exceeds the maximum amount not chargeable to income-tax in his case;

(b) in a case where the total income of the previous year [in respect of which a return of income is furnished by the Hindu undivided family under section 139 or in response to a notice under sub-section (1) of section 142] forms the basis of computation of advance tax, if the total income of any member of the family for the assessment year relevant to such previous year exceeds the maximum amount not chargeable to income-tax in his case.]

Leave a Reply

Your email address will not be published. Required fields are marked *

Get updates and weekly newsletter in your email. Join more than 10,000 subscribers !