Advance Payment of Tax

A comprehensive overview of the provisions related to “Advance Payment of Tax” under Sections 207 to 211, 217, and 219 of the Income Tax Act, 1961.

[Section 207]: Liability for Payment of Advance Tax

1. Who is Liable? Every taxpayer(individuals, HUFs, companies, firms, etc.) whose estimated tax liability for the financial year (FY) exceeds ₹10,000 after deducting TDS/TCS. Applies to: Salaried employees with additional income (rent, interest, capital gains, etc.). Self-employed professionals & businesses. Companies & firms. 2. Who is Exempt? Senior Citizens (60+ years)who are resident individuals and have no income from business/profession. Taxpayers opting […]

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[Section 207(2)]: Exemption for Senior Citizens from Advance Tax

1. Who is Exempt? Resident Individuals aged 60 years or above(Senior Citizens). Condition: Must not have any income chargeable under “Profits and Gains of Business or Profession” (PGBP). Applies to: Pension income. Rental income. Interest income (FDs, savings accounts, etc.). Capital gains. 2. Who is NOT Exempt? Senior citizens with business or professional income(must pay advance tax

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[Section 208]: Conditions for Liability to Pay Advance Tax

1. Basic Condition A taxpayer is liable to pay advance tax if: Estimated tax liability(after deducting TDS/TCS) for the financial year (FY) exceeds ₹10,000. 2. Key Scenarios Where Advance Tax Applies ✔ Salaried Individuals – If they have additional income (rent, interest, capital gains, freelance earnings, etc.) where total tax due > ₹10,000 after TDS. ✔ Self-Employed Professionals & Businesses – Since most

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Computation & Payment of Advance Tax (Self-Assessment) [Section 209(1)(a) & (d)]

1. When Does This Apply? When the taxpayer calculates their own advance tax liability(not based on the Income Tax Department’s demand). Applies to individuals, businesses, and professionalsliable for advance tax. 2. Steps for Self-Calculation of Advance Tax Step 1: Estimate Total Income for the Financial Year (FY) Include all income sources: Salary (if applicable) Business/Profession income Capital

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[Section 210(1)]: Payment of Advance Tax by the Assessee on Their Own Accord

1. Overview Under Section 210(1) of the Income Tax Act, 1961, taxpayers liable for advance tax must voluntarily calculate and pay their estimated tax liability in instalments during the financial year. This applies when: The tax liability (after TDS/TCS) exceeds ₹10,000. The taxpayer is not exempt(e.g., senior citizens without business income). 2. Key Provisions (A) Self-Calculation of Advance Tax Estimate Current

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Payment of Advance Tax Pursuant to Assessing Officer’s Order [Section 210(3) & 210(4)]

1. Overview When a taxpayer fails to pay advance tax voluntarily, the Assessing Officer (AO) can issue an order under Section 210(3) demanding payment based on: The taxpayer’s last assessed income, or The returned income(if higher than the last assessed income). If the AO later revises this demand (e.g., due to new information), an amended order under Section 210(4) may be issued. 2.

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[Section 211]: Instalments of Advance Tax & Due Dates

Section 211 of the Income Tax Act, 1961, mandates the payment of advance tax in four instalments during the financial year (FY) for most taxpayers, with specific due dates and percentages. Below is a detailed breakdown: 1. Regular Taxpayers (Non-Presumptive Income) [Section 211(1)(a)] DUE DATE % OF ADVANCE TAX PAYABLE (CUMULATIVE) KEY POINTS 15th June 15% First

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Payment of Advance Tax on Capital Gains & Casual Income [Proviso to Section 234C]

Under Section 234C of the Income Tax Act, taxpayers are generally required to pay advance tax in instalments. However, the first proviso to Section 234C(1) provides relaxation for certain types of income where estimating tax liability in advance is difficult, such as: Capital gains(short-term or long-term) Casual income(lottery, gambling, crossword puzzles, etc.) Dividend income(introduced in Budget 2021) New business income(if income

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[Section 219]: Credit for Advance Tax

Section 219 of the Income Tax Act, 1961 governs how advance tax payments are credited against a taxpayer’s final tax liability. Here’s a detailed analysis: 1. Basic Principle All advance tax paymentsmade during the financial year are fully credited to the taxpayer’s account Credit is given in the assessment year(AY) corresponding to the financial year (FY) of payment

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