Advance payment of tax under income tax 1961
Who is liable to pay advance tax ?
Computation of advance tax by assessee
Due date of instalments for payment of advance tax
Advance tax to be paid by allcompanies
Liablility to payment of advance Tax ( section 207)
According to Income Tax Act there are various provision of advance tax (section 20 to 219) shall be payable in advance tax during the financial year in respect of the total income of the assessee. Advance is chargeable to tax on current income earned during the financial year of a relevant assessment. Income earned during the financial year 2021-22 shall be charged to tax in the relevant assessment year 2022-23 but as per advance tax provision we need to pay advance tax if total tax liability is 10,000 or more (section 208) .
However senior citizen not required to pay advance tax. Senior citizen mean a individual who age is 60 year or more during the relevant financial year.
Computation of advance tax by assessee (Section 209)
According the provision of advance tax an assessee himself calculate advance tax on the estimated current income as follow.
Setp:1 Estimate the current income of the financial year for which the advance tax is payable
Step:2 Compute tax on such estimated current income at the rate of relevant assessemnt year slab.
Step:3 on the net tax if any computed also add surchage amount( If applicable)
step:4 Add health and education cess
Step: 5 Allow relief if any
Step: 6 Deduct TDS and credit if any
Step; 7 The balance amount is the advance tax payable.
Mode of payment of advance tax
Advance tax payment can be paid by using online facility using the internet banking of authorised bank.
Instalments of advance tax and due date ( Section 211)
|S N.||Due date of instalment||Amount payable|
|1||On or before the 15 June||Not less than 15% of such advance tax.|
|2.||On or before the 15th September||Not less than 45% of such advance tax as reduced by the amount if any paid in First instalment.|
|3.||On or before the 15th December||Not less than 75% of such advance tax as reduced by the amount if any paid in first and second instalment.|
|4.||On or before the 15th March||The whole amount of such advance tax as reduced by the amount or amounts if any paid in First, Second and third instalment|