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ADVANCE TAX

Updated: May 26, 2022

ADVANCE TAX


Advance tax is tax payable by individuals who have sources of income other than their salary. This is applicable to rent, capital gains from shares, fixed deposits, lottery winnings, etc. It can be paid online or through certain banks.





Advance tax is also known as ‘Pay as you earn’ scheme. The tax is payable if your tax liability exceeds Rs.10,000 in a financial year. The tax should be paid in the same year in which the income was received.


Liability for payment of Advance Tax [ Section 207 ]

As per the various provisions of advance tax , 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 . Such total income shall be referred to as " Current income " in this Chapter . We know that income earned during the financial year 2014-15 shall be charged to tax in the assessment year 2015-16 . But the assessee is required to pay tax , in advance , on the taxable income of financial year 2014-15 during the financial year 2014-15 itself .


Conditions of Liability to pay Advance Tax ( Section 208 ] Advance Tax , as computed in accordance with the provisions of this Chapter , shall be payable during a financial year , only when the amount of such advance tax payable by the assessee during that year is Rs . 5,000 or more .


Instalments of advance tax and due dates [ Section 211 ] In the case of non - company assessees , advance tax has to be paid in three instalments . However , in the case of a company assessee , advance tax is payable in four instalments . The relevant due dates of instalments are given below :


TABLE 1 For Company Assessees

​Due date of instalments

​Amount Payable

​1. On or before the 15th June

​Not less than 15 % of advance tax liability

2. On or before the 15th September

​Not less than 45 % of advance tax liability , as reduced by the amount , if any , paid in the earlier instalment ..

3 . On or before the 15th December

Not less than 75 % of advance tax liability , as reduced by the amount ( s ) if any , paid in the earlier instalment ( s )

​4. On or before the 15th March

​The whole amount of advance tax liability as reduced by the amount ( s ) if any , paid in the earlier instalment ( s )

TABLE 2 For Non - company Assessees

Due date of instalments

Amount Payable

​1 On or before the 15th September .

​Not less than 30 % of advance tax liability ;

​2. On or before the 15th December .

Not less than 60 % of advance tax liability , as reduced by the amount , if any , paid in the earlier instalment .

​3. On or before the 15th March

​The whole amount of advance tax liability as reduced by the amount ( s ) if any , paid in the earlier instalments



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