Advance Tax Computation for F.Y 2021-22

Last Updated On: March 12, 2022, 10:07 p.m.
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ADVANCE TAX COMPUTATION FOR THE F.Y 2021-22

What is Advance Tax?

Collecting Income Tax from Taxpayers in advance for the year before the financial year ends. Advance tax is payable by a taxpayer in case the tax payable is exceeding Rs.10,000.

 

How is Advance Calculated?

Advance Tax is calculated on the basis of the expected tax liability of the year.

Advance Tax is paid in the following installments:

Case I: In the case of all taxpayers except other than taxpayer taxable u/s 44AD and 44ADA

 

Sl.No Particulars Due Date
1. 15% of the estimated tax payable On or before 15th June
2. 45% of the estimated tax payable On or before 15th September
3. 75% of the estimated tax payable On or before 15th December
4. 100% of the estimated tax payable On or before 15th March

 

 

Case II: In a case of taxpayer taxable under section 44AD and 44ADA

100% of the estimated tax payable
Due Date: On or before 15th March

 

CONSEQUENCES OF NOT PAYING ADVANCE TAX:

For Failure of paying advance tax, interest is levied under section 234C and 234B :

Interest u/s 234B is levied on following 2 cases:-


1. When the taxpayer has failed to pay advance tax

2. When advance tax paid by the taxpayer is less than 90% of the final tax payable at the time of filing return

The Interest Is levied on balance amount of tax not yet paid at the rate of Interest u/s 234B is 1% per month simple interest from 1st day of assessment year till the time of payment of balance tax.

Interest u/s 234C is levied for delay in payment of instalments(s) of advance tax which will be levied in following cases:

1. If advance tax paid on or before 15th June is less than 12% of advance tax payable

2. If advance tax paid on or before 15th September is less than 36% of advance tax payable

3. If advance tax paid on or before 15th December is less than 75% of advance tax payable

4. If advance tax paid on or before 15th March is less than 100% of advance tax payable

5. In case of taxpayers who opted for presumptive taxation scheme of Section 44AD or section 44ADA interest shall be levied if advance tax paid on or before 15th March is less than 100% of advance tax payable.

No Interest u/s 234C is levied if shortfall of advance tax is due to capital gains or winnings from lottery or dividend and the taxpayers pays the same in the immediate following installment

Interest under section 234C is levied @ 1% per month simple interest for a period of 3 months, in case of short fall in payment of 1st, 2nd and 3rd installment and for 1 month, in case of short fall in payment of last installment.

 

What are the important things to keep in my mind:

  • Correct Challan number-ITNS 280 to be selected for paying advance tax
  • Correct PAN of taxpayer to be filled
  • Select Advance Tax number -100
  • Properly select the Assessment year
  • Amount and mode of payment of tax to be selected


 

How to deposit Advance Tax?

Mode of payment : Online payment

Challan of payment is generated with CIN number

Mode of payment: Offline payment

The counter-foil of the Income-tax Challan filled by taxpayers, should be stamped and returned by the bank. Please ensure that the bank stamp contains BSR (Bankers Serial number code), Challan Identification Number (CIN) and the date of payment.

 

How to check if the advance tax is deposited?

After payment, the same can be checked by viewing your 26AS through login into Income tax portal
 


 

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