Tax is paid in advance when the liability of advance tax is Rs.5, 000 or more. The provisions of advance tax are applicable on all types of persons irrespective of the residential status of the person. The advance tax is paid in the previous year itself. Thus, the tax is paid in the year of earning of income, in other words the earning of income and payment of tax goes simultaneously. Thus, the tax is paid as income is earned. This scheme of advance payment of tax is also called pay as you earn scheme, i.e., pay tax as you earn income.
CBDT PRESS RELEASE, DATED 12-9-2013
It is informed that the payment of Quarterly Advance Tax on or before 15th September, 2013 by the tax payers is a statutory requirement. All such tax payers who are liable to pay advance tax must make payments in the designated branches of the banks authorized to accept tax payments.
2. All such designated branches of authorized banks have been asked to function on 14th and 15th September, 2013 (Saturday & Sunday) to accept advance tax payments. If any tax payer fails to pay the advance tax on 14th/15th September, 2013, he can make the payment even on 16th September, 2013. - www.pib.nic.in
DATES OF PAYMENT OF ADVANCE TAX
Advance tax is paid by the all persons, both corporate assessee (company assessee) and non-corporate assessee (other than non-corporate assessee). The advance tax is to be paid in the following installments on the following dates:
For Non-Corporate Assessee
Due Dates Amount of Tax payable
On or before 15 September - not less than 30% of tax payable
On or before 15 December - not less than 60% of tax payable
On or before 15 March - not lessthan 100% of tax payable
For Corporate Assessee
Due Dates Amount of Tax payable
On or before 15 June - not less than15% of tax payable
On or before 15 September - not less than 30% of tax payable
On or before 15 December - not less than 60% of tax payable
On or before 15 March - not lessthan 100% of tax payable
Since, the actual tax and actual income can be computed only after completion of the year therefore, the income is estimated at different due dates mentioned above. The tax on such estimated income is computed and percentage of the tax as mentioned above is payable by the assessee at different due dates.
Activity A : State whether Mr. X is liable to pay advance tax and if yes then what amount should be paid by what date. The income of Mr. X is Rs. 2, 00,000.
Solution: The tax is Rs. 15,300 on income of Rs. 2, 00,000. Since, tax is more than Rs. 5,000, therefore, advance tax is payable.
The advance tax is payable as under:
Since Mr. X is a non-corporate assessee therefore, the first installment will be due on 15th September.
Date installment total tax paid
On or before 15th September - first 30% of Rs. 15,300 = Rs. 4,590
On or before 15th December - next 30% of Rs. 15,300 = Rs. 4,590
On or before 15th September - balance 40% of Rs. 15,300 = Rs. 6,120
Rs.15,300
All persons whose tax liability is Rs. 5,000 or more pay advance tax. Advance payment of tax is made in installments. The first installment is paid on 15th June by corporate assessee while non-corporate assessee pays the first installment on 15th September. The whole of advance tax is paid by 15th March by both corporate and non-corporate assessee. The payment of advance tax is thus made in the previous year itself and therefore, it helps government to speed up payment of tax and earn interest on it. Since advance tax is paid simultaneous to earning of income therefore the scheme of advance payment of tax is also known as pay as you earn scheme.
CBDT PRESS RELEASE, DATED 12-9-2013
It is informed that the payment of Quarterly Advance Tax on or before 15th September, 2013 by the tax payers is a statutory requirement. All such tax payers who are liable to pay advance tax must make payments in the designated branches of the banks authorized to accept tax payments.
2. All such designated branches of authorized banks have been asked to function on 14th and 15th September, 2013 (Saturday & Sunday) to accept advance tax payments. If any tax payer fails to pay the advance tax on 14th/15th September, 2013, he can make the payment even on 16th September, 2013. - www.pib.nic.in
DATES OF PAYMENT OF ADVANCE TAX
Advance tax is paid by the all persons, both corporate assessee (company assessee) and non-corporate assessee (other than non-corporate assessee). The advance tax is to be paid in the following installments on the following dates:
For Non-Corporate Assessee
Due Dates Amount of Tax payable
On or before 15 September - not less than 30% of tax payable
On or before 15 December - not less than 60% of tax payable
On or before 15 March - not lessthan 100% of tax payable
For Corporate Assessee
Due Dates Amount of Tax payable
On or before 15 June - not less than15% of tax payable
On or before 15 September - not less than 30% of tax payable
On or before 15 December - not less than 60% of tax payable
On or before 15 March - not lessthan 100% of tax payable
Since, the actual tax and actual income can be computed only after completion of the year therefore, the income is estimated at different due dates mentioned above. The tax on such estimated income is computed and percentage of the tax as mentioned above is payable by the assessee at different due dates.
Activity A : State whether Mr. X is liable to pay advance tax and if yes then what amount should be paid by what date. The income of Mr. X is Rs. 2, 00,000.
Solution: The tax is Rs. 15,300 on income of Rs. 2, 00,000. Since, tax is more than Rs. 5,000, therefore, advance tax is payable.
The advance tax is payable as under:
Since Mr. X is a non-corporate assessee therefore, the first installment will be due on 15th September.
Date installment total tax paid
On or before 15th September - first 30% of Rs. 15,300 = Rs. 4,590
On or before 15th December - next 30% of Rs. 15,300 = Rs. 4,590
On or before 15th September - balance 40% of Rs. 15,300 = Rs. 6,120
Rs.15,300
All persons whose tax liability is Rs. 5,000 or more pay advance tax. Advance payment of tax is made in installments. The first installment is paid on 15th June by corporate assessee while non-corporate assessee pays the first installment on 15th September. The whole of advance tax is paid by 15th March by both corporate and non-corporate assessee. The payment of advance tax is thus made in the previous year itself and therefore, it helps government to speed up payment of tax and earn interest on it. Since advance tax is paid simultaneous to earning of income therefore the scheme of advance payment of tax is also known as pay as you earn scheme.
