Due date for Payment of Advance Tax (Income Tax)

What is advance tax under Income-tax Act, 1961?

As the name suggests itself, advance tax means tax which is required to pay in advance or before the end of financial year on estimated income of that financial year.

Who are required to pay advance tax?

Every assessee is required to pay income tax in advance on the income which is chargeable to tax in an assessment year immediately following the financial year.

Exception:

Individual who is of 60 years at any time during the financial years AND does not have any business or professional income during the year.

How to compute advance tax liability?

Advance tax is computed in the following manner

A)  Estimated Income

B)    Less: Deductions

C)   Net Estimated Taxable Income (A-B)

D)  Tax on the Estimated Income (tax rate shall be as applicable in the financial year)

E)    Less: Estimated Tax Deducted at Source (TDS)

F)    Advance Tax (F=D-E)

Assessing Officer (AO) may make calculation of advance tax liability of the assessee in the following manner:

Advance Tax liability = Tax rate applicable

X      (multiplied by)

higher of (Latest assessed income by way of regular assessment by AO or Latest Returned income as filed by assessee for any subsequent year)

Instalments of Advance Tax and due dates (As applicable w.e.f. June 01, 2016)

a)     All the assesses (other than Section 44AD or 44ADA cases) are required to pay advance tax instalments as per below table:

Instalments	Due Date	Amount Payable
First	On or before June 15	15 % of advance tax
Second	On or before September 15	45% of advance tax
Third	On or before December 15	75% of advance tax
Fourth	On or before March 15	100% of advance tax

b)  An assessee who declares his business under Section 44AD or professional income under 44ADA, required to pay advance tax on or before March 15 (i.e. Such assessee have only one installment and they are required to pay 100% of their advance tax on or before March 15)

c)  Where any person pays income tax in advance even before March 31, the same is also be treated as advance tax.

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The material and information contained in this blog are for general information purpose only.  Though we have made every efforts to make our interpretation correctly, we do not make representation either express or implied about the completeness or correctness of the subject matter.  Under no circumstances the author is not responsible / liable for any loss or damage caused to anyone due to any mistake / error / omissions.