Advance Payment of Tax

One of the method of collection of tax by central government in the structure of pre-paid tax. Tax shall be payable in advance during any financial year Also known as Pay as you earn scheme. Payable on current income in installments during the previous year. In addition to TDS or TCS.

Liability for payment of Advance Tax Tax shall be payable in advance during any financial year, u/s sec.208 to 219 in respect of the current income of the assessee. Current income of the assessee refers to total income of the assessee, which would be chargeable to tax. Income Year 2006-07, A.Y-2007-08,pay tax in advance in 2006-07 itself.

Conditions of Liability to pay Advance Tax

Advance Tax shall be payable during F.Y in every case The amount of such tax payable by the assessee during that year, as computed in accordance with the provisions, is Rs.5000 or more.

Unpaid dates of payment of Advance Tax

For Company Assessee: 1. On or before 15th June 15% of Total Adv. Tax Payable 2. On or before 15th September 45% of Total Adv. Tax Payable less Adv. tax paid in earlier installment 3. On or before 15th December 75% of Total Adv. Tax Payable less Adv. tax paid in earlier installment 4. On or before 15th March 100% of Total Adv. Tax Payable less Adv. tax paid in earlier installment

 For Non-Company Assessee

1. On or before 15th September 30% of Total Adv. Tax Payable 2. On or before 15th December 60% of Total Adv. Tax Payable less Adv. tax paid in earlier installment 3. On or before 15th March Total Adv. Tax Payable tax paid in earlier installment 100% of less Adv.

Method of payment of Advance Tax by an assessee

(1) (2)

Payment by the assessee on his own accord Payment by the assessee in pursuance of an order of the Assessing Officer

I.
II. III. IV. V. VI.

The assessee has already been assessed by way of a regular assessment in respect of the Total Income of any P.Y. such notice can be issued whether the assessee has paid any installment of advance tax or not the A.O is of the opinion that such person is liable to pay advance tax such order can be passed at any time during the F.Y, but not later than the last day of February such order must be made in writing the notice of demand should specify the amount of advance tax and the installment or installments in which such advance tax is to be paid.