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Unit 14: Advance Tax Planning and Tax Relief

(ii) all the assesses (other than companies), who are liable to pay the same, in three instalments Notes
during each financial year and the due date of each instalment and the amount of such
instalment shall be as specified in Table 14.2:

Table 14.2: Due Date and Amount Payable by All Assessees (Except Companies)

Due date of instalment Amount payable
On or before the 15th September Not less than thirty per cent of such advance tax.
On or before the 15th December Not less than sixty per cent of such advance tax, as reduced
by the amount, if any, paid in the earlier instalment.
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
Provided that any amount paid by way of advance tax on or before the 31st day of March shall
also be treated as advance tax paid during the financial year ending on that day for all the
purposes of this Act.

Did u know? If the notice of demand issued under section 156 in pursuance of an order of
the Assessing Officer under sub-section (3) or sub-section (4) of section 210 is served after
any of the due dates specified in sub-section (1), the appropriate part or, as the case may be,
the whole of the amount of the advance tax specified in such notice shall be payable on or
before each of such of those dates as fall after the date of service of the notice of demand.

Task 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 ` 2,00,000.

14.2.1 Interest under Section 234C for Deferment of Payment of Tax

If you don’t pay an advance tax instalment in full, you have to pay interest at 1 per cent a month
for three months on the amount that falls short of the required payment. However, in the case of
default on the last instalment (March 15), the penal interest of 1 per cent is chargeable for only a
month is shown in Table 14.3:

Table 14.3: Interest under section 234C is liable to be paid @ 1% per month

(a) Advance Tax paid on or before 15th Sept < 30% of the Tax Due on Returned Income
OR
(b) Advance Tax paid on or before 15th Dec < 60% of the Tax Due on Returned Income
OR
(c) Advance Tax paid on or before 15th Mar < Tax Due on Returned Income
OR
(d) No Tax has been paid by the Assessee
Source: http://www.rupeex.com/doc/advancetax.html

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