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ADVANCE TAX

ADVANCE TAX

Advance_Tax_190

ADVANCE TAX

205. Liability to pay advance tax.—

(1) Every assessee shall be liable to pay advance income-tax during any financial year in respect of his total income of the financial year, if the amount of advance income-tax payable exceeds ten thousand rupees.

(2) The amount of advance income-tax payable by an assessee in the financial year shall be computed in the following manner, namely:—
(a) the assessee shall first estimate his total income and calculate income-tax thereon at the rates in force in the financial year ;
(b) the income-tax so calculated shall be reduced by –
(i) the amount of income-tax which would be deductible or collectible at source during the financial year from any income which is taken into account in estimating the total income ;
(ii) the amount of credit under section 207, allowed to be set-off in the financial year ; and
(c) the balance amount of income-tax shall be the advance income-tax payable.

(3) The advance income-tax, in case of any person other than a company, shall be payable in three installments during the financial year on or before the dates specified in column (2) of the Table given below and shall be equal to the amount specified in corresponding entry in column (3) of the said Table:

Serial number Date of installment in the financial year Amount payable

1. O n or before the 15th September. Not less than thirty per cent. of the advance income-tax.
2. On or before the 15th December. Not less than sixty per cent. of the advance income-tax, as reduced by the amount, if any, paid in
the earlier installment.
3. On or before the 15th March. The whole amount of the advance income-tax as reduced by the amount or amounts, if any, paid in the
the earlier installment.

(4) The advance income-tax, in the case of a company, shall be payable in four installments during the financial year on or before the dates specified in column (2) of the Table given below and shall be equal to the amount specified in corresponding entry in column (3) of the said Table :
Table

Serial number Date of installment in the financial year Amount payable

1. On or before the 15th June. Not less than fifteen per cent. of the advance income-tax.
2. On or before the 15th September. Not less than forty-five per cent. of the advance income-tax, as reduced by the amount, if any, paid
in the earlier installment.
3. On or before the 15th December. Not less than seventy-five per cent. of the advance income-tax as reduced by the amount or amounts,
if any, paid in the earlier installment or installments
4. On or before the 15th March. The whole amount of the advance income-tax as reduced by the amount or amounts, if any, paid in the
earlier installment or installments.

(5) Any amount of advance income-tax paid after the 15th March but before the expiry of the financial year shall be treated as advance income-tax paid during the financial year.

(6) Every person who is liable to pay advance income-tax shall, of his own volition, pay the appropriate percentage of the advance income-tax on or before the due dates.

(7) The assessee may increase or reduce the payment of remaining installments of the advance income-tax in accordance with his estimation of the total income.

(8) Where in the opinion of the Assessing Officer, any person is liable to pay advance income-tax; he may by an order in writing—
(a) Require such person to pay advance income-tax calculated in such manner as may be prescribed; and
(b) Issue to such person a notice of demand under section 162 specifying the installments in which such tax is to be paid.

(9) The person who has been served with an order under sub-section (8)—
(a) may file an estimation, in such form as may be prescribed, to the Assessing Officer, if in his estimation, the advance income-tax payable by him is lower than the amount specified in the said order ; and
(b) Pay the advance income-tax in accordance with his estimation on or before the due dates specified in this section.

(10) No order under sub-section (8) shall be passed after the last day of February of the financial year.

ADVANCE TAX

Clause 205 relates to the liability to pay advance tax. The said clause seeks to provide that every person shall be liable to pay advance tax during any financial year if the amount of advance income-tax payable by him exceeds ten thousand rupees. For ascertaining the liability to pay advance tax, the tax on estimated total income is reduced by the tax deductible or collectible at source and the amount of any tax credit available under clause 207.
The said clause further provides that persons other than companies are liable to pay advance income-tax, in three installments, i.e., on or before 15th September, 15th December and 15th March. Amount payable by these three dates should amount to 30 per cent., 60 per cent. and 100 per cent. of the advance-tax payable. Similarly for a company, there are four installments, the dates being on or before 15th June, 15th September, 15th December and 15th March. The corresponding percentages in the case of a company are 15 per cent., 45 per cent., 75 per cent. and 100 per cent. It is further provided that any amount of advance income-tax paid after 15th March but before the expiry of the financial year shall be treated as advance income-tax paid during the financial year.
The said clause also empowers the Assessing Officer to issue an order to an assessee (not after last date of February of the financial year) to pay advance income-tax in such installments as specified in the order, if in the opinion of the Officer, the assessee is liable to pay such amounts as advance income-tax. However, the assessee may still pay the advance tax in accordance with his estimation after filing such estimation to the Assessing Officer.

ADVANCE TAX

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ADVANCE TAX

ADVANCE TAX

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