Advance Tax

Tax on income is paid in advance based on estimated basis;

The concept is based on income tax is being paid in advance to the department (before assessment year
starts) and claiming the benefit of lesser tax burden at the time of actual payment.

Normal mechanism:

 Income earned during PY 2016-17;

 Tax paid during AY 2017-18. (within due date – 31st July/ 31st Sep)

Advance Tax mechanism:

 Income earned during PY 2016-17 shall be estimated ;
 Advance Tax shall be paid during PY 2016-17 only( i.e before 31st March 2017).

Advance tax shall be paid quarterly;

For all assessees: For person liable to presumptive taxation u/s 44AD:

1st Quarter – 15th June For all the quarter: 15th March

2nd Quarter – 15th September
3rd Quarter – 15th December
4th Quarter – 15th March
Note: Obligation to pay Advance Tax is imposed only to
the assessee who is liable to pay advance tax of Rs 10,000
or more
Advance tax is not payable by:

Computation of Advance Tax:  An individual being senior citizen;

 Resident in India;
Estimated income from 5 heads : XXX
 Who does not have any income from business or
Less: brought forward loss: XXX profession.

Estimated GTI: XXX

Less: Deduction during the year: XXX Interest u/s 234B:

Estimated Total Income:
Tax + cess on estimated income: XXX
Less: TDS
Advance Tax payable:
XXX  If atleast 90% of advance tax is not paid by assessee
before 31st March;
 Interest of 1% shall be imposed on such short/ non
payment of advance tax.
XXX
Interest u/s 234C:
XXX
 If the assessee liable to pay Advance tax does not
pay with the prescribed due dates;
 Interest of 1% is imposed on short payment or non
payment of advance tax.
A.O can pass an order u/s 210 against the assessee to pay advance tax

In such case assessee can accept the demand and pay Adv tax; OR

He can also pay lesser amount by declaring income on estimated basis under form 28A.