Liability to Pay Advance Tax under Income Tax Act

Who is liable to Pay Advance Income Tax under Income Tax Act? As per Section 208 of the income tax act, its obligatory to pay advance tax in every case when the tax on current income is greater than Rs.10,000/- then assessee is liable to pay advance tax. Here Tax liability is considered as criteria for eligibility for payment of advance tax. In another way we can say that when net taxable income is greater than Rs 280,000/- for Assessment year 2012-13 and Rs 300,000/- for Assessment year 2013-14. Above limits are for the resident individual and for women assessee and senior citizen limits and calculation will be based on their exemption limits. In case of salaried employee advance tax liability is take care off by employer as every employer has to deduct TDS from salary in case if salary income is taxable under income tax act .i.e Total Taxable Income is higher than exemption limit given Income Tax Slab.

Reference: Liability for payment of advance tax.

Section 207. (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.

Credit for advance tax

Section 219. Any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax in pursuance of this Chapter shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the assessment year next following the financial year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment.

Leave a Reply

Your email address will not be published. Required fields are marked *