Provisions related to Advance Tax

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Advance Tax for AY 2018-19

 

An assesse is required to pay tax during the financial year preceding the assessment year on the basis of his own computation of income. This is called advance tax.

An assesse who is liable to pay advance tax will be required to estimate his current income and pay advance tax thereon without having to submit any estimate or statement of income to the assessing authorities.

After making payment of First/second instalment of advance tax , assesse realises that income is need to be revised than, he may revise the income computed and recalculate advance tax payable and pay remaining instalments of advance tax as per revised income computed.

Computation of advance tax:

Tax can be computed on the current estimated income at the rates in force for during the financial year. From the tax so computed tax deducted / collected at source will be deducted.

Advance tax is not required to pay if the advance tax payable is less than Rs. 10000.

A senior citizen, who is resident individual and whose age is 60 year and above, not having any income from business/profession is not liable to pay advance tax.

Due dates of payment of advance tax and who are required to pay advance tax:

Due date of payment of advance taxEvery assesse except assesse falling under section 44AD and 44ADAAssesse falling under Section 44AD and 44ADA
On or before 15th JuneNot less than 15% of advance tax payable
On or before 15th SeptemberNot less than 45% of advance tax payable as reduced by the
amount paid in the earlier instalment.
On or before 15th DecemberNot less than 75% of advance tax payable as reduced by the
amount paid in the earlier instalments.
On or before 15th MarchThe whole amount (100%) of advance tax payable as reduced by
the amount paid in the earlier instalments.
The whole amount (100%) of advance tax payable

 

Example:

A, an individual, age 35 years, estimates his income as follows:

Gross total Income                                                                                                          Rs.750000

Less: Deduction under section 80C                                                                           Rs.50000

Net Income                                                                                                                     Rs.650000

 

Tax:                                                                                                                                     Rs.42500

Add: Education cess:                                                                                                        Rs.850

Add: Secondary and higher education cess:                                                           Rs.425

Total                                                                                                                                  Rs.43775

Less: Tax deducted at source                                                                                    Rs.1200

Balance to be paid as advance tax                                                                       Rs.42575

 

Advance tax in instalments:

First Instalment = 42575*15/100 = Rs.6386

Second Instalment = 42575*(45-15)/100 = Rs.12772.5

Third Instalment = 42575*(75-45)/100 = Rs.12772.5

Fourth Instalment = 42575*(100-75)/100 = Rs.10644

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