Latest Advance Tax payment rules under Income Tax Act, 1961: All you need to know

financialexpress.com:

Question: Can you provide an overview of the Advance tax provisions under the Income-tax Act 1961?

Answer by Dr Suresh Surana, Founder, RSM India: Advance tax, as the name suggests, is a tax paid by the taxpayers in the financial year in which the corresponding income is earned as opposed to the assessment year in which such income is assessed to tax. Such tax is computed on the consolidated income earned and expected to be earned from various sources (i.e., salary income, rent income, interest income etc.) during the financial year, after adjusting the applicable deductions, exemptions, TDS/TCS credit, etc.

In accordance with section 208 of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’), every person whose estimated tax liability for the year is Rs. 10,000 or more, shall be liable to pay advance tax. However, resident senior citizens aged 60 years or more during the relevant financial year and not having any income from business or profession would be exempt from payment of advance tax.

Generally, advance tax payments are required to be paid in specified instalments every quarter on or before the specified due dates, failing which the taxpayer would be subjected to certain interest consequences. However, specified professionals such as doctors, lawyers, architects etc. having opted for presumptive scheme u/s 44AD or 44ADA of the IT Act would be required to pay their entire advance tax liability in one instalment (vis-à-vis quarterly instalments applicable to other taxpayers) on or before the 15^th March of the relevant financial year.

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Taxpayers failing to pay their advance taxes in due