Advance Tax Payment - Due Dates & Mode of Advance tax payment
Liability of advance tax payment
As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”. In this part you can gain knowledge on various provisions relating to payment of advance tax by a taxpayer.
Person not liable to advance tax payment
As discussed above, every person whose estimated tax liability for the year is Rs. 10,000 or more is liable to pay advance tax.
Note:- However, a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax.
In other words, if a person satisfies the following conditions, he will not be liable to pay advance tax:
1) He is an individual
2) He is resident in India as per the Income-tax Act
3) He is of the age of 60 years or above at any time during the year
4) He is not having any income chargeable to tax under the head “Profits and gains of business or profession”
A taxpayer opting for the presumptive taxation scheme of section 44AD is also liable to pay advance tax in respect of business covered under section 44AD.
Due dates of advance tax payment
Advance tax is to be paid in different instalments. The due dates for payment of different instalments of advance tax are as follows:
| Status for advance tax payment | By 15th June | By 15th September | By 15th December | By 15th March |
| All assessees (other than the eligible assessee as referred to in Section 44AD or section 44ADA) | Minimum 15% of advance tax | Minimum 45% of advance tax | Minimum 75% of advance tax | Minimum 100% of advance tax |
| Taxpayers who opted for presumptive taxation scheme of section 44AD or section 44ADA | Nil | Nil | Nil | Minimum 100% of Advance tax |
Note 1: Any tax paid till 31st March will be treated as advance tax
Note 2: If the last day for payment of any instalment of advance tax is a day on which the banks are closed, then the taxpayer should pay the advance tax on the immediately following working day [Circular No. 676, dated 14-1-1994].
Mode of advance tax payment
As per Rule 125 of the Income-tax Rules, 1962 a corporate taxpayer (i.e., a company) shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks.
Taxpayers other than a company, who are required to get their accounts audited, shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks.
Any other taxpayer can pay tax either by electronic mode or by physical mode i.e. by depositing the challan at the receiving bank.
Payment of advance tax
Advance tax can be paid by the taxpayer either on his own account or in pursuance of an order of the Assessing Officer.
The taxpayer who is liable to pay advance tax is required to estimate his current income and pay advance tax on his own account. In such a case, he is not required to submit any estimate or statement of income to the tax authorities.
After making payment of first or second or third instalment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining instalment(s) and pay the tax as per revised estimates.
Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. From the tax so computed, tax deducted or collected at source will be deducted and the balance tax payable will be used to compute the advance tax liability. Also, relief of tax allowed under section 90 or section 90A or any deduction under section 91 or any tax credit allowed to be set off as per section 115JAA or section 115JD shall also be deducted while computing the advance tax liability.
Advance tax payment in pursuance of an order of A.O.
If taxpayer fails to pay advance tax (or advance tax paid is lower than the required amount) and he has already been assessed by way of regular assessment in respect of the total income of any previous year, then the Assessing Officer may pass an order under section 210(3) requiring him to pay advance tax on his current year’s income (specifying the amount of instalments in which tax should be paid). Such an order may be passed during the financial year, but not later than the last day of February.
On receipt of the notice from the Assessing Officer to pay advance tax, if the taxpayer’s estimate is lower than the estimate of the Assessing Officer, then the taxpayer can submit his own estimate of current income/advance tax and pay tax accordingly. In such a case, he has to send intimation in Form No. 28A to the Assessing Officer.
Alternatively, if the advance tax on current income as per own estimate of the taxpayer is likely to be higher than the amount estimated by the Assessing Officer, the taxpayer shall pay such higher amount as advance tax in accordance with his own calculation. In such a case, no intimation to the Assessing Officer is required.
The Assessing Officer can revise his order issued to the taxpayer to pay advance tax (as discussed above) under section 210(4). Such revision can be done, if subsequent to the passing of an order to pay advance tax but before 1 st March of the relevant financial year a return of income in respect of any later year has been furnished by the taxpayer or any assessment for any later year has been completed at a higher figure. On receipt of such order, the procedure to be followed by the taxpayer will be same as discussed earlier.