Course Name: Principal of Taxation

Equipped by: Md. Abul Hasan Mamun

Email: hasan.mamun@aqcbd.com

Advance Payment of Tax

Requirement to pay Advance Payment of Tax :U/S 64
Advance tax is payable by an assessee during each financial year if the latest assessed income
(assessment completed either on regular or provisional basis before the fifteen May of the year)
exceeds (600,000) Six lakh taka.

Income from Agricultural‘ and ‘Capital Gain’ excluding gain from transfer of share of a
company listed with a stock exchange are not includible for determining the ceiling of income
or the purpose of liability for advance payment of tax

Computation of Advance Tax U/S-65:

The amount of advance tax payable by an assessee in a financial year shall be the amount equal
to the tax payable on his total income of the latest income year as assessed on regular basis
or provisionally, as the case may be, as reduced by the amount of tax required to be deducted or
collected at source in accordance with the provisions regarding to deduction or collection or tax
at source The tax payable as above is determinable at the rate in force during the concerned
financial year

Installment of Advance Tax S 66

Advance tax is payable in four equal instalments on:
 15th September
 15th December
 15th March and
 15th June

Estimate of Advance Tax U/S-67:

While preparing the estimate, one must take sufficient care that the tax paid on the basis of the
estimate does not fall short of 75% of the payable on regular assessment because, if the tax
paid falls short, he is liable for interest.

Advance payment of tax by different types of assessee: section 68

 In case of existing assessee:
In case of existing assessee, advance tax is to be calculated on the basis of his last assessed
income. If his last assessed total income exceeds Tk. 600,000/ [excluding agricultural
income and capital gain (other than capital gain from sale of share)] he is required to pay
advance tax. (See-64)
Course Name: Principal of Taxation
Equipped by: Md. Abul Hasan Mamun
Email: hasan.mamun@aqcbd.com
 In case of new assessee:
A new assessee who has not previously been assessed shall also required to pay advance
tax if his current year’s income [excluding agricultural income and capital gain (other than
capital gain from sale of share)] is likely to exceed Tk. 600,000/ (See.68)

 In case of cigarette manufacturer:

A cigarette manufacturer shall pay advance tax @ 3% on net sales in every month. This
monthly advance tax will be adjusted against quarterly installments.
The formula of net sale=A-B
Where A=Gross sale
B=VAT & SD (if any)

Failure to pay instalment of Advance Tax S 69

Where an assess fails to pay any instalment of advance tax, he will be deemed to be an assessee
in default Penalty may be imposed for such default.

Interest payable by Government on excess payment of advance tax: section

72
If the amount of advance tax paid is in excess of the amount of tax payable as determined on
regular assessment, the Government shall pay simple interest at 10 per annum on such excess
payment Interest will be paid for the period from lst July of the year of assessment to the date of
regular assessment in respect of the income of that year or a period of two years from the said 1
st July, whichever is shorter (U/s 72

Interest payable by the Assessee S 73

Where in any financial year advance tax paid by an assessee together with the tax deducted or
collected at source, if any, is less than 75 of the amount of tax payable by him as determined or
regular assessment, the assessee shall pay, in addition to the balance of tax payable by him,
simple interest the rate of 10 per annum on the amount by which the tax so paid deducted and
collected falls short of the 75 of the assessed tax

Provided that the rate of interest shall be 50 higher if the return is not filed on or before the Tax
Day.

The period for calculation of simple interest shall be the period from the first day of July of the
year in which the advance tax was paid to the date of regular assessment in respect of the income
of that year or a period of two years from the said first day of July whichever is shorter.