Diff in advance tax & income tax

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Naveen Ahlawat (Querist)
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30 October 2010 R/Sir,

Please tell me the diff. & similarities between advance tax & income tax.Why we deposit the advance tax & what is the advantages of advance tax.please tell me in detail.

Please provide me some notes if possible .

Regards,
Naveen Kumar

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Guest (Expert)

30 October 2010 CHAPTER – XVII C - ADVANCE TAX

[1.] Section 207: Tax shall be required to be paid during the Financial Year on the estimated income of the Financial Year, which will be taxable during the Assessment Year.
[2.] Section 208: Who shall be required to pay tax in advance? :
The liability to pay tax in advance arises only if the amount of such final tax payable (including Surcharge and Education Cess) is Rs. 10,000/- or more for the whole Financial Year. (Otherwise, in a case where the final tax payable for the year is less than Rs. 10,000/-, then assessee can pay Self-Assessment Tax.)
[3.] Section 209: Calculation of the amount of Advance Tax:
The amount of final tax payable can be found out in the following manner.
a) Estimate the Net Total Income for the current year.
b) Estimate the total tax liability on such current year income.
c) From such tax calculated as above reduce the followings:-
i) DTAA Relief U/S 90/90A/91
ii) Any other Rebate or Relief
iii) MAT credit U/S 115JAA
iv) Tax deductible at source
v) Tax collectible at source
d) Include Surcharge and Education Cess at the rate applicable to the assessee.

[4.] Section 211: Due dates for payment of Advance Tax Installment:-
% of Installment
DUE DATE FOR CORPORATE ASSESSEE FOR NON-CORPORATE ASSESSEE
15th June of the P.Y. 15 % NIL
15th September of the P.Y. 45 % 30 %
15th December of the P.Y. 75 % 60 %
15th March of the P.Y. 100 % 100 %

[5.] Section 218: Failure to pay advance tax inst. will render the assessee to be deemed to be an assessee in default.

Naveen Ahlawat

Naveen Ahlawat (Querist)
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30 October 2010 THANKS FOR THE REPLY..BUT I WANT TO KNOW IF WE ARE UNABLE TO DEPOSIT THE ADVANCE TAX ON DATE, WE ARE LIABLE TO PAY INTEREST @1% OR ANY OTHER RATE OF INTEREST..PLEASE TELL ME ASAP.

REGARDS,
NAVEEN KUMAR

RANGA SRINIVAS

RANGA SRINIVAS (Expert)
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30 October 2010 You are liable to pay interest under Section 234B and C

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