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    by: rahul walia

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    1 : Advance Payment of Tax Rahul walia
    2 : What is Advance Tax? Liability for Payment of Advance Tax. Condition of Liability to pay Advance Tax. Computation by Assessee himself. Computation of Advance Tax by Assessing Officer. Due dates for Advance Instalment. What makes its Applicability to BUIDCo. Consequences for Non/Late Payment of Advance Tax. Matters to be Discussed
    3 : Advance Payment of Tax is another method of collection of Tax by the Central Government. Such Advance Tax is Addition to Deduction/Collection of Tax at source. Thus the Scheme is known as “Pay As You Earn”. Advance Tax is paid in Previous Year itself, thus the Tax is paid in the year of earning itself. Advance Tax is paid when the Liability for Payment of Tax is more than Rs. 10000. What is Advance Tax ?
    4 : Tax shall be payable in Advance during the Financial Year in respect of the total income of the Assessee which would be chargeable to Tax for the Assessment Year immediately following that Financial Year. We Know that Income Earned During the Financial Year 2012-13 shall be Charged to Tax in the Assessment year 2013-14. But the Assessee is Required to Pay Tax, in Advance, on the Taxable Income of Financial Year 2012-13 During the Financial Year 2012-13 itself. Senior Citizens not required to pay Advance Tax The provision of Advance Tax shall not apply to an Individual resident in India, who:- (a) does not have any income chargeable under the head “Profit and gains of business or profession”; (b) is the age of 60 years or more at any time during the previous year. Section 207:-Liability for Payment of Advance Tax
    5 : Where the Assessee is carrying on Business referred to in Section 44AD, He is not Required to Pay Advance Tax for the Income Related to such Business. Tax Paid in advance when the Liability is 10000 or more. Section 208:-Condition of Liability to Pay Advance Tax
    6 : Current Income shall be Computed as Follows:- Estimate The Current Income of the Financial Year for Which advance Tax is Payable. Compute Tax on Such Estimated Current Income at the Given Slab Rate. Add Surcharge:- Surcharge is Applicable in Case of a Company Assessee Only. Add Education Cess + SHEC to the Amount computed under IV. Allow Relief, if any, Under Section 89,90,90A, 91. Deduct the Tax Deductible or Collectable at Source During the Financial Year From Any Income Which has been Taken into Account in computing the Current Income. The Balance Amount is the Advance Tax Payable Provided it is 10000 or More It Includes Capital Gain (Both short Term and Long term) wining from lotteries, Crossword puzzles for computation of Advance Tax on current non agricultural income, even agricultural income will be included for rate purpose. Section 209:-Computation of Advance Tax by Assessee himself What Constitutes Current Income ?
    7 : The Assessing officer May Pass an Order Under Section 210(3) or Amended Order 210(4) and Issue A notice of Demand Under Section 156 Requiring to Assessee to Pay Income Tax . Such Order can be Passed only When the following Conditions are Satisfied:- The Assessee has Already been assessed by way of Regular Assessment in Respect of the Total Income of Any Previous Year. The Assessee has Paid any Installment of Advance Tax or not. The Assessing officer is of the Opinion that Such Person is Liable to Pay Advance Tax. Such Order can be Passed at any Time During the financial Year but not Later then a last Day of February. The Notice of demand Should Specify The Amount of Advance Tax and the Installment in which such Advance Tax is to be Paid. Payment of Advance Tax in Pursuance of an Order /amended Order of assessing Officer
    8 : Section 211:-Instalment of Advance Tax and Due Dates
    9 : For Determine the Advance Tax Payable by the Assessee , Assessing Officer Shall Take the Current Income of the Assessee to be the Higher of the following:- The Total Income of the Latest Previous Year in Respect of which the Assessee has been assessed by Way of Regular Assessment. The Total Income Returned by Assessee for Any Previous Year Subsequent to the Previous Year for Which Regular Assessment has been Made. From the following Data Determine the Current Income of the assessee for Which Order can be Passed by the assessing Officer for the Assessment Year 2013-2014. Assessment Year Particulars Amount 2008-2009 Returned Income 1100000 2009-2010 Assessed Income 800000 2010-2011 Returned Income 700000 2011-2012 Returned Income 650000 2012-2013 ----------------- Returned Not Yet Filed. In Above Case the Asssessing Officer can Pass order u/s 210(3) for the Current Financial Year 2012-2013 by Taking his Current Income to be 800000 i.e. On the Basis of the Income Assessed for the Latest A.Y or Returned Income of any Subsequent Year i.e. 700000, Whichever is higher. Determination of Current Income by Assessing Officer
    10 : Amendment of Order for Payment of Advance Tax Section 210(4). If After Making the Order By assessing Officer but before 1st March (a) Return of Income is Furnished by assessee u/s 139 or in Response to a Notice u/s 142(1) , (b)A Regular Assessment of the assessee is Made in in Respect of a Later Previous Year .For Any Higher Figure then the Assessing Officer may Amend the his order and Issue to such Assesse a Notice of Demand u/s 156. Example:- From the Data Given Above Discuss Weather or not Amended Order can be Passed by the A.O. in the Following Case:- The Assessee Subsequently Files Return of Income of A.Y. 2012-2013 for 900000. The Assessee Subsequently Files Return of Income of A.Y. 2012-2013 for 750000. Answer:- The A.O. can Passed Amended Order u/s 210(4) as a Return of later year is Filed For 900000 Which is Higher then 800000. The A.O. can not Passed Amended Order u/s 210 (4) as Return of Subsequent A.Y. is only for 750000 Which is less then 800000.
    11 : Section 209(2):-Net Agricultural Income to be Taken into Account for Computing Advance Tax Agricultural Income Forms Part of Current Income Discussed Under The Following Two Situation:- Where the Advance Tax is to be Paid by Assessee on the Basis of his Estimate:- It Shall be Estimated Agricultural income of Current F.Y. Relevant to A.Y. for which Advance Tax Payable. Where the Advance Tax is Payable in Pursuance of an Order/Amendment Order of Assessing Officer u/s 210(3) 210(4). It Shall be:- That Agricultural Income of which the Assessee has been Assessed by way of Regular Assessment. OR That agricultural Income for Which Total Income Returned by Assessee for any Previous Year Subsequent to the Previous Year for Which Regular Assessment has been Made.
    12 : What Makes it’s Applicability Over Buidco
    13 : Consequences if Advance Tax is not Paid or Paid Less or if There is Deferment of Payment of Advance Tax. If Advance Tax is not Paid or the Amount of Advance Tax Paid is less then 90% of Assessed Tax, the Assessee shall be Liable to Pay Simple Interest @1% per Month from First Day of April Following the Financial Year u/s 234B. Similarly, if the Payment of Advance Tax is Deferred Beyond the Due Dates ,Interest @1% per Month for a Period of 3 Month , will be Payable for Every Deferment, Except for the Last Instalment of 15th March Where it will be 1% for one Month, u/s234C.
    14 : Marginal Relief Marginal relief shall be Available and the Total Amount Payable as Income Tax and Surcharge on Current Income Exceeding one Crore shall not Exceed the total Amount Payable as Income Tax on a Current Income of One Crore by More than the Amount of Income Tax that Exceed One Crore. Example :
    15 : The Returned Income of an Assessee for the A.Y. 2012-2013 is 400000.The Advance Tax has been Deposited as under:-14.09.2012 2000012.12.2012 2200015.03.2013 32000Calculate the Interest Payable u/s 234C if the Assessee is an Indian company. Tax = 120000 (400000*30%) Add:-Education cess + SHEC- @3% 3600 (120000*3%) Total Amount to be Paid 123600 Amount Payable by 15.6.2012 15% of 123600 =18540 Less: Deposited = Nil Balance = 18540 Interest @1% per Month for 3 Month =555 (18500*3%) Amount Payable by 15.09.2012 45% of 123600 =55620 Less: Deposited =20000 Balance =35620 Interest @1% Per Month For 3 Month =1068 (35600*3%) Amount Payable By 15.12.2012 75% of 123600 =92700 Less: Deposited =42000 Balance =50700 Interest @1% Per Month for 3 Month =1521 (50700*3%) Amount Payable by 15.03.2013 Total Amount = 123600 Less: Deposited = 74000 Balance = 49600 Interest @1% per Month for 1 Month = 496 (49600*1%) Q.

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