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ADVANCE TAX |
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ADVANCE TAX |
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Section 208 of the Income Tax Act, 1961 (‘Act’ for short) provides that advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of the Act, is Rs.10000/- or more. Senior citizen, a resident individual who is at least 60 years of age at any time during the financial year and not having any income from business or profession is not liable to pay advance tax. Like that an assessee who has opted for the scheme of computing business income under Section 44AD on presumptive basis at the rate of 8% of the turnover is also exempted from payment of advance tax with effect from the assessment year 2011-12. The advance tax shall be payable by the assessee on his own accord if his tax liability exceeds as per Section 208 of the Act. Advance tax, in some case, is payable in pursuance of order of Assessing Officer. In case of assessee paying tax on his own accord shall first estimate his current income and income tax at the rates in force in the financial year. The statement of estimation is not required to be sent to the department for the payment of advance tax. In the subsequent payment an assessee may be required to prepare revised estimate. In this estimate the tax already paid may be deducted. Such revised estimate is also not required to be sent to the department. The due date for payment of tax is provided in Section 211. There are two categories prescribed for this purpose. One is companies and the other is other than companies. The companies are required to pay advance tax in four installments at the prescribed rate and the other group requires paying advance tax in three installments at the prescribed rate as per the details given below:
Any amount paid by way of advance tax on or before 31st March, shall also be treated as advance tax paid during the financial year ending on that day for all the purposes of this Act. If such payment is made after the end of the financial year then it will not amount to advance tax for the preceding year. If the due date for payment of advance tax is a holiday the assessee can make payment on the next immediately following working day. The Corporate assessees and other assessees who are subject to compulsory audit under Section 44AB are to pay tax electronically. It is at the option of the assessee to make electronic payment. An assessee can also make payment from the account of any other person. In such cases the challan number shall indicate the PAN of the assessee on whose behalf the payment is made. An assessee who had earlier been assessed to income tax failed to pay advance tax, then the Assessing Officer may pass an order under Section 210(3) of the Act requiring him to pay advance tax on his current year’s income in Form No. 28. The order must specify the different installments in which the advance tax should be paid. Such order may be passed during the previous year but not later the last day of February. On receipt of notice the assessee can submit his estimate of lower income or advance tax and pay the tax with intimation in Form 28A to the Assessing Officer. Such estimate cannot be rejected by the Department. If the assessee is likely to pay more than the amount as estimated by the Assessing Officer, the assessee shall pay higher tax and in such cases no intimation is required to be given to the Department. The Assessing Officer is having power to revise the order under Section 210(3). taxmanagementindia.com If an assessee who is liable to pay advance tax, has failed to pay such tax he is liable to pay interest @ 1% on the assessed tax (‘assessed tax’ means the tax on total income determined under Section 143(1) or on regular assessment as reduced by tax deducted or collected at source. MAT or AMT credit and relief under Section 90/90A/91 will be further deducted) for every month or part of month from April 1 of the assessment year to the date of determination of income under Section 143(1) and where a regular assessment is made to the date of such regular assessment. An assessee, who has paid advance tax but the amount of advance tax paid by him is less than 90% of assessed tax, he is liable to pay interest on assessed tax minus advance tax paid by him, @ 1% for every month or part of month from April 1 of the assessment year to the date of determination of income under Section 143(1) and where a regular assessment is made to the date of such regular assessment. Interest may be waived or interest may be reduced where any income accrues or arises for any previous year due to the operation of any order of a Court, statutory authority or of the Government (other than the order of assessment, appeal, reference or revision) passed after the close of the said previous year by the Chief Commissioner/Director General subject to the conditions that-
Interest reduction or waiver is given for the following period:
Chief Commissioner/Director General (Investigation) are having power to reduce penal interest under Sections 234A, 234B and 234C in the following circumstances:
Interest is payable to the assessee where any refund arises due to any excess payment of tax. For this purpose there is no need for making claim of refund.
By: DR.MARIAPPAN GOVINDARAJAN - August 10, 2012
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