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Apart from TDS and TCS, the Government collects taxes on a quarterly basis in the form of advance tax before the end of a financial year, ensuring constant flow of tax revenue during the year rather than at the year-end. 

Who is liable to pay advance tax?

Every taxpayer whose total estimated tax liability after TDS and TCS exceeds Rs. 10,000.

Who is not liable to pay advance tax?

A senior citizen (i.e. a resident individual who is at least 60 years of age at any time during the financial year) not having any income from business or profession, is not liable to pay advance tax.

What type of income is liable for advance tax?

Any type of income (including capital gains, winning from lotteries, crossword puzzles etc.) are liable for payment of advance tax.

Due dates of Advance Tax for the FY 2020-2021

Due dates for payment of advance tax for FY 2020-21  

    

Due Date

Tax Payable

On or before 15 June 2020

15% of advance tax

On or before 15 September 2020

45% of advance tax

On or before 15 December 2020

75% of advance tax

On or before 15 March 2021

100% of advance tax

  • Any payment made after 15 March but on or before 31 March shall also be as advance tax paid during the financial year.
  • If the last day for payment of any instalments of advance tax is a day on which the bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable would not be charged.
  • After making payment of first or second instalment of advance tax, the taxpayer can revise the remaining instalments of advance tax in accordance with his revised estimate of current income and pay tax accordingly.
 

Interest and penalty

Interest at 1 per cent a month is levied for three months in the case of deferral of tax payment, which is due on June 15, September 15 and December 15, and for one month in the case of deferral of payment of the last instalment, i.e., tax that is due on March 15.

If the total amount of advance tax paid amounts to less than 90% of the taxpayer’s advance tax liability, interest is payable at the rate of 1% per month from April 1, following the year in which the tax is due, until balance payment of the tax.

Disclaimer:  This is meant purely for general education purpose. While the information is believed to be accurate to the best of my knowledge, I do not make any representations or warranties, express or implied, as to the accuracy or completeness of this information. Reader should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. This note is not an offer, invitation, advice or solicitation of any kind. I accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.

 
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Category Income Tax, Other Articles by - CA Rahul Mittal 



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