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How to calculate Advance tax

Advance Tax Provisions under the Income Tax Act’1961

1.  Advance Tax is applicable for all assesses whose Tax Liability exceeds Rs. 10,000/- during the financial year.

2.  Advance Tax is payable as follows:

Particulars

Up to 15th June of financial year 15% of Tax Payable for company.

Not Applicable for Noncompany

Up to 15th September of financial year

45% of Tax Payable for company

30% of Tax Payable for noncompany

Up to 15th December of financial year

75% of Tax Payable for companies

60% of Tax Payable for noncompany

Up to 15th March of financial year

100% of Tax Payable

100% of Tax Payable

Points to remember:-

1. Advance Tax provisions are not applicable in case of assesses having income under head Profits & Gains from Business or Profession U/s 44AD and 44AE i.e presumptive income.
2. Advance Tax provisions are not applicable in case of senior citizens aged above 60 years, but if senior citizens have business income then Advance Tax provisions are applicable.
3. Note above points are applicable for residents only i.e exemptions are available only for residents. No exemption for senior citizens if such individual is Non-resident.
4. Advance Tax can be paid by challan ITNS 280 under the minor head code 100 and Major Head code is 0020 for tax on Companies and 0021 for Tax on other than Companies.
5. Tax can be paid by challan either by cheque, cash or by the online mode.

Interest on Late Payment of Advance Tax

If the Income Tax is not paid as per the above schedule, Interest is liable to be paid for late payment of tax as follows

1.     Interest under section 234B – Interest @ 1% is payable if 90% of the tax is not paid before the end of the financial year i.e. for Default in Payment of Advance Tax

2.     Interest under section 234C – Interest @ 1% per month is payable if the tax is not paid as per the above schedule i.e. for Deferment in Installments of Advance Tax.

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