Advance Tax Payment : Due Date and Interest on Late Payment

If the income tax liability of any assessee is more than Rs.10,000.00 in any financial year, then he is liable to pay such tax in installments during the year itself rather than paying this tax at the end of the year. This tax which is payable during the year is called "Advance Tax"  or pay as you earn tax as tax is liable to be paid at the time of income to be earned, i.e. during the year rather than paying this tax at the end of the year.

Advance tax receipts help the government to receive the constant flow of tax receipt throughout the year, so that expenses can be incurred rather than receiving all tax payments at the end of year. Advance tax liable to be paid by all assessee like Salaried, Self Employed, Businessman, etc. before the filling of Income Tax Return.

For the Individuals with the salary as the sole source of income, advance tax would be taken care of by the TDS deducted by the employer at the time of payment of salaries as reflected in form 16 and thus there would hardly be any advance tax payable.For all assessee earning income from any source other than salary, advance tax is payable in installments as explained below.

PAYMENT OF ADVANCE TAX

Advance tax is liable to be paid as per the following schedule :

Assessee other than Companies
Due Date	Amount Payable
On or before 15th September	Not less than 30% of the advance tax liability
On or before 15th December	Not less than 60% of the advance tax liability as reduced by the amount if any, paid in earlier installment
On or before 15th March	100% of the advance tax liability as reduced by the amount if any, paid in earlier installment

In case of Companies
Due Date	Amount Payable
On or before 15th June	Not less than 15% of the advance tax liability
On or before 15th September	Not less than 45% of the advance tax liability as reduced by the amount if any, paid in earlier installment
On or before 15th December	Not less than 75% of the advance tax liability as reduced by the amount if any, paid in earlier installment
On or before 15th March	100% of the advance tax liability as reduced by the amount if any, paid in earlier installment

Payment of advance Income tax is to be made through Callan no. 280 by selecting advance tax (100) as the type of payment.


COMPUTATION OF ADVANCE TAX

Advance tax is liable to be paid by estimating the current year income and then applying the tax rates as per the Income Tax Slabs in force. The Advance tax shall be computed as under :

Add/Less	Particular	Amount
	Income under 5 heads	xxx
Less:	Brought Forward losses and allowance	xxx
	Gross total Income	xxx
Less:	Chapter VI-A Deduction	xxx
	Estimated Total Income	xxx
	Tax on Estimated total income	xxx
Add:	Surcharge (if any)	xxx
	Total tax Payable	xxx
Less:	Relief U/S 89	xxx
	Tax Liability	xxx
Add:	2% Education Cess	xxx
Add:	1% SAHEC	xxx
	Total tax Liability	xxx
Less:	Relief u/s 90, 90A, 91	xxx
Less:	MAT Credit u/s 115JA	xxx
Less:	TDS as shown in form 16/16A and reflected in form 26AS	xxx
	Advance Tax Liability	xxx

PAYMENT OF ADVANCE TAX IN CASE OF CAPITAL GAINS

Although Advance tax is liable to be paid on all incomes including Capital Gains. It is not practically possible to estimate the capital gains which may arise in an year. Therefore, in such cases, it is provided that if any such income arises after the due date of any installment, then the entire amount of tax payable on such capital gain (after claiming exemption under section 54) shall be paid in remaining installments of capital gains which are due. If the entire amount of tax payable is so paid, then no interest on late payment will be leviable.

INTEREST ON LATE PAYMENT OF ADVANCE TAX

If the income tax is not payable as per the above schedule, interest is liable to be paid late payment of advance tax as follows :

1. Interest under section 234C - Interest @ 1% p.m. is payable if the tax is not paid as per the above schedule, i.e. for Deferment of advance tax.
2. Interest under section 234B - Interest @ 1% p.m. is payable if 90% of the tax is not paid before the end of the financial year, i.e. default in payment of advance tax.

For computing interest u/s 234A/B/C and any other interest income, Tax shall be rounded off to nearest hundred and fraction of hundred shall be ignored.

IN CASE ADVANCE TAX PAID BY ASSESSEE IS MORE THAN HIS ACTUAL INCOME TAX LIABILITY, THEN HE CAN CLAIM REFUND OF INCOME TAX BY FURNISHING HIS INCOME TAX RETURN.