Are you grappling with the intricacies of advance tax? We’re here to demystify the concept and provide you with a comprehensive understanding.
- Advance tax means tax paid in the financial year immediately preceding the A.Y. (i.e.Р.У.)
Advance tax refers to the tax paid by individuals or entities in the financial year immediately preceding the Assessment Year. In simple terms, it’s paying your taxes in advance based on an estimation of your income for the current year.
- Advance shall be calculated by estimating the current year income then applying tax rates, TDS/TCS & MAT credit shall be deducted to arrive at Advance tax liability.
The calculation of advance tax involves estimating your income for the current financial year and applying the applicable tax rates. Any Tax Deducted at Source (TDS) or Tax Collected at Source (TCS), along with any credit for Minimum Alternate Tax (MAT), is deducted to determine the advance tax liability.
- Assessee is required to pay Advance tax if his liability for advance tax is 10,000% or more
Assessees are required to pay advance tax if their tax liability for the advance tax year is 10,000% or more. However, there are exceptions for Resident Senior Citizens who don’t have income under the head “Profits and Gains of Business or Profession” (PGBP).
Exceptions:- Resident Senior citizen not having income under the head “PGBP”.
4.Due dates of Advance tax for all Assessee
| Due Dates | Amount of Advance Tax |
| Upto 15th June of P.Y. | upto 15% of advance tax liability |
| Upto 15th September of P.Y. | upto 45% of advance tax liability |
| Upto 15th December of P.Y. | upto 75% of advance tax liability |
| Upto 15th March of P.Y. | upto 100% of advance tax liability |
- Note:Tax paid upto 31st March of P.Y, is treated as advance tax.
- If Assessee opts for Sec 44AD/ADA (Presumptive PGBP) then due date of Advance tax is 15th March of P.Y (only one instalment).
5. Payment of Advance Tax in pursuance of order of A.O (Section 210)
If Assesee has not paid or short paid the advance tax then A.O. may make order u/s 210 and ask assessee to pay advance tax in the installment/ installments due after the date of the order, A.O. can pass order upto last day of feb. of P.Y. The Assessing Officer shall compute the advance tax by taking:
(i) the total assessed income of the latest PY for which assessment has been made ,or,
(ii) the total income declared in the return of income of any subsequent P.Y. (i.e. subsequent to the previous year for which assessment has been made) whichever is higher.
Conclusion:
Understanding advance tax is crucial for effective tax planning and compliance. For expert guidance and assistance with advance tax and other tax-related matters, consider consulting top income tax consultants and advisors. They can provide tailored services to meet your specific needs and ensure smooth income tax filing in India.
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