advance tax

Tax queries 626 views 2 replies

Manish

final student

32 Points Posted on 07 October 2009

is there any compulsion of deposit of advance tax if it is more than Rs.5000/-??

Replies (2)

Sunil

Trader

2616 Points Posted on 07 October 2009

If you receive a demand from your AO to pay advance taxes, then yes there is a compulsion. AO will normally determine estimate based on history of your returns and assessment and if your income has dropped you will have to get the estimate revised and pay the advance tax as per your estimate.

Regarding your question on compulsion, please note that your tax payment itself is compulsory and if you do not pay any amount as per mandated schedule, you will have to pay the interest. There are also provisions for levying penalty. In case of consistent or habitual defaults by you in tax payments, there are provisions for AO to issue you a show cause notice as to why penalty should not be levied on you. You will be given an opportunity to answer.

Sunil Liladhar Kotak

Manager (F & A)

2025 Points Posted on 07 October 2009

Dear Manish,

Pls find the saction which prescribes the condition for the payment of advance tax,

¹⁹[Conditions of liability to pay advance tax.

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 of this Chapter, is ²⁰[ten thousand] rupees or more.]

This is the condition which is applicable in general

Thanks,

sunil