Meaning of Advance Tax:-
Advance tax is payable with respect to the income earned during a financial year. However, such income is assessable in the subsequent financial year called the assessment year. While computing advance tax, income-tax on the current income has to be first determined and the tax on such income has to be determined. From such tax, the amount of tax deductible or collectible at source during the financial year is to be reduced and the balance amount after reducing TDS and TCS is liable to be paid as advance tax.
As per section 208, advance tax shall be payable in every case where the amount of tax payable by the assessee during that year is in excess of Rs. 5,000/-.
As per section 211, advance tax is payable by companies in four instalments; i.e., not less than 15% is payable on or before 15th June, not less than 45% is payable on or before 15th September, not less than 75% is payable on or before 15th December, and the whole amount of such advance tax is payable on or before the 15th March.
In the case of a non-corporate assessees, advance tax is payable in three instalments. Not less than 30% of the advance tax is payable on or before 15th September, not less than 60% is payable on or before 15th December and the balance tax is payable on or before the 15th March.
In cases where advance tax paid is more than the assessed tax, the assessee would be entitled to refund along with interest. However, for non-payment of tax or deferment of tax, interest would be payable. Up to assessment year 1989–90, interest was payable for late filing of return u/s. 139(8), interest for short payment of advance tax and/or for deferment of advance tax was payable as per sections 215 to 217 of the Income tax Act. Apart from interest, AO could also levy penalty under section 273. However, from assessment year 1989–90, interest and penalty provisions have been clubbed and interest for delay in filing return of income is payable u/s. 234A, interest for shortfall in payment of advance tax is payable u/s. 234B and interest for deferment of advance tax is payable u/s. 234C. The provisions of levy of interest u/s. 234B and 234C of the Act are discussed in this article.
Sorry to disturb once again that 15 th December 2009 is a date to plan Advance Income Tax and deposit in time.
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