Is there any compliance if an assessee revises its estimate of income for advance tax?
Yes, there is a provision for an assessee to revise the estimate of income for advance tax. The assessee can update the income estimate and pay advance tax before the specified due dates without the need to file the revised income estimate with the tax department.
Can estimate of income be revised for the purpose of advance tax?
Certainly, if the assessee wishes to revise the estimate of income after making payments for the first or second instalment of advance tax, they are allowed to do so. The remaining instalments of advance tax can be adjusted in accordance with the revised estimate of current income.
What will be the due date for the payment of advance tax if the same is payable by virtue of an order from the Assessing Officer/ Income Tax Officer?
If advance tax is payable due to a notice of demand issued by the Assessing Officer, the whole or part of the advance tax is payable in the remaining instalments due during the financial year after the date of notice.
Who is not required to pay Advance tax?
A resident senior citizen (individual aged 60 years or above during the financial year) with no income from business or profession is exempt from paying advance tax. However, taxpayers who opted for the presumptive taxation scheme under section 44AD or section 44ADA are required to pay 100% of advance tax by 15th March.
Can I claim the deduction of Advance tax payments against my profits?
Advance tax is not considered an expense; instead, it is treated as an asset. It is adjusted against one’s tax liabilities at the time of finalization of the Balance Sheet. It represents a charge on income and is shown under Loans and Advances in the Balance Sheet.
What to do if I forgot to bifurcate the amount of tax, surcharge, and Cess while making the online payment?
While it’s advisable to show the total tax liability with proper bifurcation, if it’s not done during payment, there’s no need to panic. Mention the total amount in the income-tax column while filing the return. Correct bifurcation details can be filled during the return filing, and they will be checked by CPC during processing.
How do advance tax payments get reflected in Form 26AS?
Once the Advance Tax is paid, it is reflected in the assessee’s Form 26AS within 3-4 working days. Banks upload challan details to TIN within 3 working days after the tax payment is realized online. The details of self-assessment/advance tax are automatically posted into the assessee’s Form 26AS.
What should be kept in mind while making payment of tax?
While making payment, it’s crucial to clearly mention the head of payment, amount, mode of payment, type of payment, assessment year, and the unique identification number (PAN) allotted by the IT Department. Confirm these details before proceeding with the payments.
How to compute advance tax on capital gains income?
Advance tax is payable on total income, including capital gains and casual income. Since it’s challenging to estimate income from capital gains in advance, any such income arising after the due date of an instalment should be paid in the remaining instalments of advance tax. No interest for late payment is levied if the entire amount of advance tax is paid by the specified due date.
In case of advance tax, when is the assessee considered as assessee-in-default?
For the purpose of advance tax, an assessee is considered as an assessee-in-default if they do not pay the advance tax on receiving the order from the Income-tax officer by the due dates or do not file an intimation in Form 28A before the instalment due date.
What should we do if the bank is closed on the last day for payment of advance tax?
If the last day for payment of advance tax falls on a day when banks are closed, the payment made on the immediately following working day will be considered timely, and no interest shall be charged. Online modes, such as internet banking and debit cards, can also be used for tax payments.
Does credit of TDS allowed while calculating advance tax?
Yes, credit for TDS is allowed while calculating advance tax. Every person with an estimated tax liability of INR 10,000 or more after TDS deductions is required to pay advance tax, and the credit for TDS is considered in this calculation.
Who is responsible to file Form 28A?
If the Assessing Officer’s estimation of current income is higher than the assessee’s estimate, the assessee is required to file an intimation in Form 28A. This form should include the estimate of income and advance tax and must be filled and signed by a person authorized to sign a return of income.
What is Form 28A?
Form 28A is an intimation sent by the Assessing Officer if their estimation of the current income is more than the assessee’s estimate. This form, prescribed under Rule 39 of the Income-tax Rules, provides an estimate of the reduced income and advance tax.
What should I do on receiving the notice from the income-tax department for the payment of advance tax, if my actual income is more than what is determined by the tax officer?
If the Assessing Officer orders the assessee to pay advance tax, and the assessee believes that the year’s advance tax liability is lower, an estimation of income and the amount of tax payable should be submitted in Form No. 28A to the Assessing Officer. Alternatively, if the tax demand calculated by the Income-tax officer is lower than the tax liability computed by the assessee, the assessee should pay the advance tax as per their own computation without informing the Income-tax officer.
Which tax rates are to be used for computing advance tax liability?
For computing the advance tax liability, the prevailing tax rates or the rates in force of the previous year for which the advance tax is to be computed should be used.
When is the Assessing Officer liable to determine the Advance tax liability?
If a taxpayer with a legal obligation to pay advance tax fails to make payment, or if the advance tax paid is lower than the correct amount, the Assessing Officer may pass an order asking the taxpayer to pay tax on the assessee’s current year income. Such an order should clearly specify the amount payable and the number of instalments in which it needs to be paid. This order should be passed anytime during the previous year but before 1st March.
What is the procedure for computing advance tax?
Advance tax is liable to be paid in every case where the advance tax payable is Rs. 10,000 or more. A Resident Senior citizen not having any income from business/profession is exempt from paying advance tax. An assessee who opts for the presumptive taxation scheme under section 44AD and section 44ADA is required to pay advance tax related to such business. The computation of advance tax involves a detailed calculation considering various sources of income, deductions, and applicable taxes. The Advance tax calculator is available on the official income tax website.
What is the due date for payment of Advance tax and Self Assessment tax?
The due dates for payment of different instalments of advance tax vary. For assessees other than those covered under section 44ADA, the due dates are on or before 15th June (15% of advance tax), 15th Sept (45% of advance tax), 15th Dec (75% of advance tax), and 15th March (100% of advance tax). For assessees covered under section 44AD and section 44ADA, the advance tax is required to be paid on or before 15th March. Self-assessment tax should be paid before the date of filing the return of income.
Who is liable to pay Advance tax?
As per Section 208 of the Income Tax Act, every person, including individuals, firms, and companies, whose estimated tax liability for the year after TDS is Rs. 10,000 or more, is required to pay advance tax. However, individuals with only salary income are not required to pay advance tax, as the liability to deduct and deposit tax is on the employer.
Can payment of advance tax be made through any bank account?
It is not necessary to make the payment of taxes from the assessee’s own account in an authorized bank. The payment can be made from the account of any person, but the challan used for payment must clearly indicate the Permanent Account Number (PAN) of the assessee on whose behalf the payment is made.
