Advance Income Tax Under Section 147

An individual having latest assessed income of Rs.1,000,000/- or more is required to pay advance tax on quarterly basis is as under: -

( A / 4 ) – B

 

A means is the tax assessed for the latest tax year including the effect of minimum tax under 

section 113.

4 means is the 4 quarter installments

B means is the tax deduction or paid at source in the quarter.

 

Company or AOP

A company or an AOP is required to pay advance tax on quarterly basis as under: -

 

( A x B / C ) – D

 

D means is the turnover for the quarter;

B means is the tax assessed for the latest tax year;

C means is the turnover for the latest tax year; and

D means is the tax paid in the quarter.

 

Where the company or AOP fails to provide turnover or the turnover for the quarter is not known then it shall be taken to be 1/4^th of 110% of the latest tax year for which return has been filed.

 

An individual shall pay quarterly advance tax on 15^th September, 15^th December, 15^th March and 15^th June.

 

An Company or an AOP shall pay quarterly advance tax on 15^th September, 15^th December, 15^th March and 15^th June.

 

A company or an AOP shall also be liable to pay quarterly advance tax in the absence of latest assessed income or declared turnover. They shall pay advance tax on the basis of quarterly estimated profit / turnover including the effect of turnover tax under section 113 and act under section 113C

 

If the taxpayer individual, company or AOP is of the view of that his income for the current tax year would likely be less than his latest tax year then he may file an estimate of his income to the Commissioner at any time before the due date of last installment and can pay advance tax for the current tax year accordingly.

The estimate of the lower tax liability shall contain:

i.                     Turnover for the completed quarters;

ii.                   Estimated turnover of the remaining quarters; and

iii.                  Documentary evidence of estimated expenses / deductions

If the taxpayer filed an estimate and his advance tax paid is less than 90% of tax liability of the relevant tax year he shall be liable to pay default surcharge.

 

If a company or AOP is of the view that its income for the current tax year should likely the more than its latest tax year then it shall file an estimate before the end of 2^nd quarter and shall pay advance tax accordingly i.e. 50% up to 2^nd quarter and remaining 50% in 3^rd or 4^th quarters.

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