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Advance Tax Due Dates, Calculation, Applicability

These Provisions are applicable from the Financial year 2016-17. For previous years up to 2015-16 click here

  1. What is Advance Tax
  2. Applicability
  3. Due Date for payment
  4. Calculation and Payment
  5. Notice by Assessing Officer
  6. Difference Between Advance Tax and Self Assessment Tax

What is Advance Tax

Income Tax Act requires to deposit income tax on an estimated basis even before the completion of the financial year. This tax is called Advance Tax which is nothing but income tax paid before completion of the financial year.

And tax paid after completion of year is called self-assessment tax.

Applicability

Advance tax is payable in a case where the amount of tax payable in respect of such financial year is Rs. 10,000 or more. It is applicable to all persons whether Individual, HUF, Firms, LLP, Company, AOP, BOI. Non-residents are also required to deposit advance tax.

Resident individuals who are over 60 years of age (Senior Citizen) 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

Due DateAmount Payable
15th June15% of advance tax liability.
15th September45% of advance tax as reduced by the amount paid in the earlier installment.
15th December75% of advance tax as reduced by the amount paid in the earlier installments.
15th March100% of advance tax as reduced by the amount paid in the earlier installments.

Note: In the case of the assessee which are filing tax return at presumptive basis under section 44AD or 44ADA or tax on higher income than specified percentage of 6%,8% or 50% as the case may be, due date to pay the entire amount of advance tax in one instalment is 15th March of the financial year.

Calculation and Payment

First estimate the Total Income for the year

Tax on such estimated income as per applicable ratesA
Less: TDS Deducted/DeductibleB
Less: TCS Collected/Collectible from the assesseeC
Advance Tax (D)A -B -C
Advance Tax Instalment Payable
Advance TaxD
Percentage defined for installment (15 or 45 or 75 or 100)E
Advance Tax already paid in earlier installments for the yearF
Advance Tax Instalment Payable D*E – F

Deduction under Chapter VIA is allowable while computing liability of advance tax.

If a person who has already paid one or more installments revises his estimate of current income, he may reduce or increase his remaining installments on the basis of revised current income.

Any amount paid as income tax on or before 31st March shall also be treated as advance tax paid during the financial year ending on that day.

Payment is made by Challan No/ITS 280.

If the advance tax is not paid till due date, then interest is payable @ 1% as calculated under section 234C.

The assessee may verify status his Advance Tax deposited through the following links:

  1. Form No.26AS: The tax deposited can be seen in Form 26AS. Please note that it will take 4-5 days to be reflected.
  2. NSDL e-Governance: Challan Status Inquiry can be made through OLTAS Application (NSDL) by visiting https://tin.tin.nsdl.com/oltas/index.html.

Notice by Assessing Officer

  1. Where the assessee is required to pay advance tax on order of assessing officer by virtue of section 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
  2. If the assessing officer has an opinion that an assessee is liable to pay advance tax, then he can issue a notice of demand under section 156 specifying the installment(s) to be paid by assessee. Provided that such notice cannot 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.
  3. If after making an order by A.O under section 210(3), but on or before the last day of February
    • Return of income is furnished under section 139
    • Return is furnished in response to notice under section 142(1)
    • Regular assessment is made in respect of year later than referred to in sub section 3.

    Assessing officer may make an amended order under section 156 requiring the assessee to pay advance tax on each due date(s) falling after such amended order.

  4. A person who is served the 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.
  5. A person who is served the 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 installments under section 211 such higher amount of advance tax.

Advance Tax Due Dates up to Financial Year 2015-16

There are two changes for Financial year up to 2015-16 from above provisions-

  1. Due date and percentage of advance tax to be paid is different
Due DateFor all companiesFor all other assessees
15th June15%Not Applicable
15th September45%30%
15th December75%60%
15th March100%100%
  1. Persons filing the return under section 44AD i.e., tax on presumptive basis are not required to pay advance tax at all.

Difference Between Advance Tax and Self Assessment Tax

Any tax paid before completion of a financial year is Advance Tax. While tax paid after completion of the financial year by assessee without receipt of any demand notice is called self-assessment tax. Code for payment of advance tax is “100” while for self-assessment tax it is “300”. If the tax is paid after assessment on notice of demand then tax is to be paid as Tax on regular assessment under tax code “400”.

Income Tax Act

Following are the sections of the Income Tax Act, 1961 which deal with the provisions of advance tax:

  • Section 208: Conditions of liability to pay advance tax
  • Section 209: Computation of advance tax
  • Section 210: Payment of advance tax by the assessee of his own accord or in pursuance of an order of Assessing Officer.
  • Section 211: Instalments of advance tax and due dates.

Also check: Income Tax Department Guide

About Prateek Agarwal

Prateek Agarwal is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He writes mainly about GST and Finance.

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