Advance Tax under Income Tax Act

Advance Tax is the one of the major source of revenue of the Government. Advance Tax is not a separate but the deposit of Income Tax in differential installments through out the Financial Year. The provisions of Advance Tax is governed by Section 207 of the Income Tax Act, 1961.


For the ready reference, the Provisions of Section 207 is reproduced as below:

Sec. 207 - Liability for payment of advance tax

(1) Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as "current income".

(2) The provisions of sub-section (1) shall not apply to an individual resident in India, who—

(a) does not have any income chargeable under the head "Profits and gains of business or profession"; and (b) is of the age of sixty years or more at any time during the previous year.


It is clear from the above, The Senior Citizen Assessee who doesn't have any income from Business or Profession, is not liable to pay Advance Tax under Income Tax.


For the ready reference, the Provisions of Section 208 is reproduced as below:


Section 208 to Section 219 includes the various provisions relating to Computation, Payment methodology, Manner, etc relating to Advance Tax as specified aforesaid.


However, there are certain key elements which relates to Advance Tax is as follow:


As per Section 208 of the Income Tax Act, 1961, it specifies the Conditions for Liability for payment of advance Tax. As the Section 207 speaks about the Liability for payment of advance tax but the section will be triggered only if the Conditions under Section 208 is met. Looking at the section 208, it speaks as follows:


" Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is ten thousand rupees or more "


Further, as per Section 211, who deals with the Installments of advance tax and due dates, it speaks about the Installment of advance tax is as follows:


Status By 15th June By 15th Sept By 15th Dec By 15th March


All assessees (other

than the eligible Up to 15% of Up to 45% of Up to 75% of Up to 100% of

assessee as advance tax advance tax advance tax advance tax

referred to in

Section 44AD

or section 44ADA)


Taxpayers who opted

for presumptive Nil Nil Nil Up to 100% of

taxation scheme of advance tax

section 44AD or

section 44ADA


At last, In case of default in payment of Advance tax or the Short Payment of Advance Tax, the Interest shall be levied u/s 234A, 234B & 234C as the case may be or all of them.


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