Advance Tax Liability for the A.Y. 2022-23 (FY 2021-22)
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. Following are key points related to Advance Tax Liability for the A.Y. 2022-23:
(a) Section 211(1) was amended by Finance Act 2016 to provide that advance tax will be paid in four installments of 15%, 45%, 75% and 100% of tax payable on the current income by 15th June, 15th September, 15th December and 15th March, respectively in case of all assesses.
Earlier upto A.Y. 2016-17 the assessee other than corporate assessee paid Advance Tax in three Installment. Now all assessee except assessee covered u/s 44AD is treated at par for Advance Tax provisions.
(b) An assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be, can deposit whole amount of Advance Tax during each financial year on or before the 15th March. [Section 211(b)]
Based on above amendments the advance tax related provision under income tax law is as under:
Advance tax (Section 208, 209 & 211)
Advance tax is payable on all income during the financial year in every case where the amount of such tax payable by an assessee during that year is Rs. 10,000 or more. Following is chart showing Advance Tax Liability for the A.Y. 2018-19:
Advance Tax Liability for All Assessee (other than covered under section 44AD of the I.T. Act 1961)
| Due Date | Installment Payable |
| On or before 15th Jun, 2021 | Not less than 15% of advance tax. |
| On or before 15th Sep, 2021 | Not less than 45% of advance tax as reduced by the amount paid in the earlier installment. |
| On or before 15th Dec, 2021 | Not less than 75% of advance tax as reduced by the amount paid in the earlier installments. |
| On or before 15th Mar, 2022 | The whole amount (100%) of advance tax as reduced by the amount paid in the earlier installments. |
Advance Tax Liability for Assessee covered under section 44AD of the I.T. Act 1961
| Due Date | Installment Payable |
| On or before 15th Jun, 2021 | — |
| On or before 15th Sep, 2021 | — |
| On or before 15th Dec, 2021 | — |
| On or before 15th Mar, 2022 | The whole amount (100%) of advance tax as reduced by the amount paid in the earlier installments. |
Note:
- Resident individuals who are over 60 years of age and do not have income chargeable under the head ‘Profits and Gains of Business or Profession’ are not required to pay advance tax.
- Any amount paid by way of advance tax on or before 31st March shall also be treated as advance tax paid during financial year ending on that day
- Deduction under Chapter VIA are allowable while computing liability of advance tax.
- TDS is to be reduced from total tax liability of assessee and then specified percentage be calculated of advance tax.
Mode of payment of advance tax
Corporate Taxpayer: 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.
Frequently Asked Questions on Advance Tax
What is the Advance Tax and why it is paid in Advance?
Tax is a major source of fund for any Government in the world. In India as per general provision of the Income Tax Act, 1961 every person whose income is exceeds threshold exemption limit is liable to pay income tax. However for speedy and efficient tax collection a mechanism is developed by government in the form Advance Tax. Advance tax is a payment mechanism in which tax is deposited by assessee in installment instead of entire amount deposited at the end of financial year. For assessee’s point of view advance tax is helpful for fund management as the tax liability is divided in installments.
Which Income attracts liability to pay Advance Tax under Income Tax Act 1961?
There is no exemption to particular income. If any income which is liable to tax and total tax liability after TDS Credit exceeds Rs.10,000/- then Advance Tax has to be deposited on or before specified dates.
Whether entire Advance Tax can be deposited at the end of relevant previous year?
As per amendment in section 211 of Income Tax Act 1961 by Finance Act 2017, an assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be, can deposit whole amount of such advance tax during each financial year on or before the 15th March
What is meant by self-assessment tax?
Self Assessment tax means any balance tax paid by the assessee on the assessed income after taking TDS and Advance tax into account before filing the Return of income.
What are the Statutory Provisions for payment of Advance Tax in India?
Following are the sections of the Income Tax Act, 1961 which deal with the provisions of advance tax:
- Section 208: Conditions of liability to pay advance tax
- Section 209: Computation of advance tax
- Section 210: Payment of advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer.
- Section 211: Installments of advance tax and due dates.
When Advance tax is payable? / Who is liable to pay Advance Tax in India?
As per section 208, advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee is ten thousand rupees or more. Thus provision of advance tax is applicable on all assessee whose tax liability comes more than Rs.10,000/-. However in case following case advance tax need not be deposited :
1) where entire tax liability is covered by TDS deducted then in this situation advance tax is not applicable.
2) Resident individuals who are over 60 years of age and do not have income chargeable under the head ‘Profits and Gains of Business or Profession’ are not required to pay advance tax. Further assessees covered under section 44AD of the Act can deposit his liability of entire advance tax upto 15th March 2018.
What are the due dates and amount of advance tax payment paid in India?
|
Type of Assessee |
By 15th June 2021 | By 15th Sept 2021 | 15th Dec 2021 | 15th March 2022 |
| All Assessee except covered u/s 44AD |
15% |
45% | 75% |
100% |
| Assessee Covered u/s 44AD |
— |
— | — |
100% |
Note: Any tax paid till 31st March 2022 is treated as advance tax.
Whether a Non-Resident Indian (NRI) or a Non Resident is required to pay Advance Tax in India?
Yes. The advance tax is applicable on both Non-Resident Indian (NRI) or a Non Resident if they have any income accrue during the year in india.
How can I pay income tax? / What are the mode of payment of Advance Tax?
Advance Tax can be deposited through cash, cheque and electronic mode (Debit Card/Credit Card). The challan specified for advance tax is ITNS 280. All designated branches of banks empanelled with the Income Tax Department are accepted the advance tax. Assessee can pay Advance Tax Online through TIN-NSDL website.
What are the penal consequences in case of failure to deposit Advance Tax within prescribed time?
If advance tax is not paid or the amount of advance tax paid is less than 90% of the assessed tax, the assessee shall be liable to pay simple interest @1% p.m. u/s 234B from 1st day of assessment year upto date of deposit tax & interest. Further u/s 234C if the payment of advance tax is deferred beyond the due dates, interest @1% p.m., for a period of 3 months, will be payable for every deferment, except for the last installment of 15th March where it will be 1% for one month.
What is remedy in case Bank is closed on Last day to Deposit Advance Tax?
If the last day for payment of any installment of Advance Tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the panel interest for delay in deposit Advance Tax.
How can assessee verify the status of his tax deposition and other tax credit?
Due care should be taken with respect to PAN, Assessment Year and tax Code before depositing advance tax. The assessee may verify status his Advance Tax deposited through following links:
- Form No.26 AS: The credit of tax depsoited would be reflected in Form 26AS within one week of making the payment.
- NSDL e-Governance: Challan Status Inquiry can be made through OLTAS Application (NSDL) by visiting https://tin.tin.nsdl.com/oltas/index.html.
Can Income tax department issue notice to assessee for payment of Advance Tax ?
Yes, the Assessing Officer may pass an order upto the month of February requiring assessee to pay Advance Tax. Assessing Officer may pass an order u/s 210(3) of the Income Tax Act 1961 or amended order u/s 210(4) and issue a notice of demand u/s 156 requiring assessee to pay Advance Tax.
In case assessee found that income estimated by Assessing Officer is higher than his own estimate then assessee may submit Form No. 28 containing his own estimated income and tax.
Whether agricultural income would be included in total income for computing advance tax ?
Yes. Net agriculture income to be taken into account for computing advance tax in terms of section 209(2) of Income Tax Act, 1961.
How to Compute Advance Tax Liability ?
The Computation of Tax Liability for the determine Advance Tax is given in below table:
|
Particulars |
Amount |
| Income from salary (Net) |
XXXXX |
| Income from house property (Net) |
XXXXX |
| Profits and gains of business or profession(Net) |
XXXXX |
| Capital gains(Net) |
XXXXX |
| Income from other sources(Net) |
XXXXX |
| Gross Total Income |
XXXXX |
| Less : Deductions under Chapter VI-A (u/s 80C to 80U)) |
(XXXXX) |
| Total Income (i.e., taxable income) |
XXXXX |
| Tax
on total income at applicable rates |
XXXXX |
| Less : Rebate under section 87A |
(XXXXX) |
| Tax Liability After Rebate |
XXXXX |
| Add: Surcharge |
XXXXX |
| Tax Liability After Surcharge |
XXXXX |
| Add: Education cess @ 2% on tax liability after surcharge |
XXXXX |
| Add: Secondary and higher education cess @ 1% on tax liability after surcharge |
XXXXX |
| Tax liability for the year |
XXXXX |
| Less: TDS |
(XXXXX) |
| Tax payable |
XXXXX |
| Advance Tax |
(Above Tax) x (specified percentage u/s 211) |
Download challan of Advance Tax/Self Assessment Tax
YOU MAY ALSO LIKE:
No u r not liable for advance tax pay our tax with return
No u r not liable to deposit advance tax. Pay your tax with return.
For 44AD , If i paid 100% advance tax on 29 march, am i liable to pay interest u/s 234C ??
Since this article is about AY 2018-2019, you should have read the Finance act 2017 properly before penning this down. Assessees covered u/s 44ADA (similar to 44AD) have too been extended the benefit to pay entire advance tax in one installment before 15th March of PY.
Spreading incorrect knowledge is counter productive and can lead to people filing wrong returns post reading such blogs.
Please verify the facts and amend your post.
Thank you for updating the article and correcting the error.
thanks for updating
I received notice u/s 143(1) for interest payable u/s 234b and 234c. I am a salaried employee playing IT through TDS, I have no major other income . I have paid almost total IT payable in 12 equal instalments.Is interest payable notice correct.
Please send chart and calculation of advance tax for the A Y 2018-2019 ( F Y 2017-2018 ) as possible with video
One of our office employees paid the advance tax on 07.03.2018th..using IT Challan 280 with PAN deatils and thesame got reflected in his 26AS.and not been deducted through tds.
So, will it be considered for the Assessment year 2018-19 or not ? And the employee will get retire within December 2018.
Please do let me know..Thanks.
Sir, I have received an IT department demand under section 234B and 234C. I am a salaried person with no other incomes like interest, capital gains, etc. When I contacted Accounts Department of my employer, they say that the TDS HAS BEEN DEDUCTED ON EQUATED INSTALMENTS ON ESTIMATED ANNUAL SALARIES FROM TIME TO TIME AND DEPOSITED EVERY MONTH WITH THE IT DEPARTMENT WITHIN PRESCRIBED TIME LIMITS. NOW, MY QUERY IS WHETHER THE DEDUCTOR OF TDS COULD BE HELD RESPONSIBLE FOR NOT FOLLOWING THE ADVANCE TAX INSTALMENTS DEPOSIT RULES…I WISH FOR EXPERT RULINGS WHICH COULD BE AGREED UPON BY THE PARTIES INVOLVED….MAY BE SOME WRITTEN GUIDANCE…. EAGERLY WAITING FOR EXPERT REPLIES THANKS A LOT
what is the last date to pay income tax for senior citizen who is not liable to pay advance tax?
For A.Y.2018.19