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Income Tax Laws – I

Notes Kindly do not use this challan for depositing tax deduction at source (TDS)
Kindly ensure that the bank’s acknowledgement contains the following:
1. 7 DIGIT BSR CODE OF THE BANK BRANCH
2. DATE OF DEPOSIT OF CHALLAN (DD MM YY)

3. CHALLAN SERIAL NUMBER
These will have to be quoted in your return of income.

Self Assessment

State whether the following statements are true or false:
1. Advance Payment of tax is method of collection of tax by the Central Government in the
Form of Prepaid Taxes.
2. The advance tax is not paid in the previous year.
3. Tax on current income at the rate in force during the financial year will be calculated by
the Assessing Officer.
4. Advance Tax cannot be deposited through Challan.

14.2 Advance Tax Payment: Due Dates and Interest on Late Payment

Advance Tax receipts help the Govt. to receive a constant flow of tax receipts throughout the
year so that expenses can be incurred rather than receiving all tax payments at the end of the
year. Advance Tax is liable to be paid by all assesses like Salaried, Self Employed, Businessman
etc. before the filing of Income Tax Return.
For Individuals with Salary as the sole source of income, Advance Tax would be taken care of by
the TDS deducted by the employer at the time of payment of salaries as reflected in Form 16 and
thus there would hardly be any Advance Tax payable. For all assesses earning income from any
source other than salary, Advance Tax is payable in instalments. Advance tax on the current
income calculated in the manner laid down in section 209 shall be payable by:
(i) all the companies, who are liable to pay the same, in four instalments during each financial
year and the due date of each instalment and the amount of such instalment shall be as
specified in Table 14.1 below:

Table 14.1: Due Date and Amount Payable under Advance Tax

Due date of instalment Amount payable
On or before the 15th June Not less than fifteen per cent of such advance tax.
On or before the 15th September Not less than forty-five per cent of such advance tax, as
reduced by the amount, if any, paid in the earlier instalment.
On or before the 15th December Not less than seventy-five per cent of such advance tax, as
reduced by the amount or amounts, if any, paid in the earlier
instalment or instalments.
On or before the 15th March The whole amount of such advance tax as reduced by the
amount or amounts, if any, paid in the earlier instalment or
instalments.
Source: http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2005ITAct/section211.htm

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