# A Birds eye view of Advance tax provisions embedded under Income-tax Act, 1961

Pooja jain , 16 August 2014

What is advance tax?

U/S 208�Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions.

Who is liable to pay advance tax?

� U/S208 assessee means any person who is liable to pay the income tax. i.e.

AOP, FIRMS, INDIVDUAL ,PATNERSHIPC0MPANY etc.

� This section is apply only whose assessee those tax liability after deduct the TDS is more then 10000/-

Example:-

An assessee have a tax liability of 50000/- and his TDS is 30000/-�����������������������������������������

Balance Tax liability-50000-30000=Rs20000/-

Then this section is apply on this assessee if after deduct the TDS his liability is less than�10000/-, then do not apply on this assessees.

How is it calculated?

Calculation of Interest for assessee other then companies

Example-

An assessee have a tax liability of 50000/- and his TDS is 30000/-�����������������������������������������

Balance Tax liability- 50000-30000= Rs20000/-

Calculation:

1)�Interest for first instalment-�20,000 * 30% =�6000/-

6000*1%*3month=180/-

2 Interest for second instalment-20,000 * 60% = 12000/-

12000*1%*3month=360/-

3) Interest for Last instalment-�20,000 * 100% = 20000

20000*1%*1month=200/-

Total Interest U/S 234c - 180+360+200=840/-

Penal provisions on failure to comply with the advance tax provisions

� If any kind of assessee, Company or other then company does not pay the advance tax then these assessee are consider the defaulty by income tax department.

� They have to pay the SIMPLE INTEREST @1% per month.

� Default of every instalment they have to pay interest of 3 months except for March.

� If they do default of March�s instalment have to pay only 1month.

� Last date of payment is 15 March, but the payment made before 31 March is consider as advance payment of tax. However the assessee is liable to pay interest u/s 234c.

Suggested points:-

For all types of assessee

� If assessee have income other than salaried they should calculated their tax liability after deducting TDS starting of the assessment year (current year).

� If their liability is exceed 10000/- then they have to pay the advance tax.

For the company

� According to Section 211 Company who is liable to pay the advance tax u/s 208. They should paid 15% of his total Tax liability, before or on 15 June of current year in which he earned the INCOME.

� Company who is liable to pay the advance tax u/s 208. They should paid 45% of his total Tax liability, before or on 15 September of current year in which he earned the INCOME.

� Company who is liable to pay the advance tax u/s 208. They should paid 75% of his total Tax liability, before or on 15 September of current year in which he earned the INCOME.

� Company who is liable to pay the advance tax u/s 208. They should paid % of his total Tax liability, before or on 15 September of current year in which he earned the INCOME.

� If an assessee is a salaried person only they should not need to pre calculation of tax liability because their employer deducts TDS according to their tax liability.

� But if assessee who is salaried person only change the job and their pay scale also increase, they should calculated the tax liability after� 2nd,3rd& 4th quarter. If their liability is exceed 10000/-

For other than Company

� According to Section211 an assessee other than company who is liable to pay the advance tax u/s 208. He should paid 30% of his total Tax liability, before or on 15 September of current year in which he earned the INCOME.

� An assessee other than company who is liable to pay the advance tax u/s 208. He should paid 60% of his total Tax liability, before of on 15 December of current year in which he earned the INCOME.

� An assessee other than company who is liable to pay the advance tax u/s 208,He should paid 100% of his total Tax liability, before or 15 March� of current year in which he earned the INCOME.

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Category Income Tax, Other Articles by - Pooja jain

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