Question

Mr. Ravi is a Chartered Accountant. His estimated tax liability for the financial year 2023 – 24 amounted to ₹ 3,00,000. By which date should he pay advance tax and how much ?

Hint:

Advance tax is paid in instalments on 15 June, 15 September, 15 December and 15 March at 15%, 45%, 75% and 100% of the tax.

Answer 1

Step 1: Rule on advance tax:
Under Section 208 of the Income Tax Act, a person must pay advance tax if the tax payable for the year is ₹10,000 or more.
Mr. Ravi's estimated tax is ₹3,00,000 for FY 2023-24 (AY 2024-25). So he must pay advance tax.

Step 2: Due dates and share (Section 211):
On or before 15 June 2023: at least 15% of the tax.
On or before 15 September 2023: at least 45% of the tax (total up to that date).
On or before 15 December 2023: at least 75% of the tax (total up to that date).
On or before 15 March 2024: 100% of the tax (total up to that date).

Step 3: Amounts for Mr. Ravi:
By 15 June 2023: 15% of ₹3,00,000 = ₹45,000.
By 15 September 2023: 45% of ₹3,00,000 = ₹1,35,000 in all, so a further ₹90,000.
By 15 December 2023: 75% of ₹3,00,000 = ₹2,25,000 in all, so a further ₹90,000.
By 15 March 2024: 100% = ₹3,00,000 in all, so a further ₹75,000.

Step 4: Special case:
If Mr. Ravi opts for the presumptive scheme for professionals (Section 44ADA), he may pay the whole advance tax in one go on or before 15 March 2024.
If he misses the dates, interest is charged under Sections 234B and 234C.

Final Answer:
He must pay in four instalments: ₹45,000 by 15 June, ₹1,35,000 (cumulative) by 15 September, ₹2,25,000 (cumulative) by 15 December and ₹3,00,000 (cumulative) by 15 March.