ADVANCE PAYMENT OF TAX Ranjan Kumar Bhowmik row Former Member National Board of Revenue Advance income tax is the tax which is to be paid by the assessee in advance either by deduction or collection of tax at source or by payment of quarterly instalments. (1) Who is liable to pay advance tax? Both existing and new assesses are liable to pay advance income tax. In case of existing assessee if his last assessed total income exceeds TK. 600,000. At the time of considering last assessed income the following income will be excluded: [ | gain one-time income which is non-recurring in nature. However, an who’s only source of income is agriculture and if that agricultural me does not exceed Tk. 8,00,000 he will not have to pay any advance tax. [section 154] (2) What is the basis on which advance payments should be calculated? In case of existing assessee: In case of existing assessee, advance tax is to be calculated on the basis of his last assessed income. If his last assessed total income exceeds Tk. 600,000/ [excluding capital gain and one-time income. [See-154] In case of new assesset ‘A new assessee who has not previously been assessed shall also require to pay advance tax if his current year’s income [excluding capital gain and one-time income] is likely to exceed Tk. 600,000/ [See.156] (3).When and how advance tax is to be paid? Advance tax is to be paid in the following 4 equal instalments on the basis of financial year for which the tax is payable: [section 155]~ 15th September | Ist instalment | 2nd instalment : 15th@December | | 3rd instalment : 15th Mareh | | 4th instalment + 1Sth game : - (4) Whether withholding tax at source will be treated as advance tax? (YEB withholding tax is also to be treated asadvance paymentiof tax. [Sec. 155] (5)_What will happen in case of excess payment of advance tax? If the advance tax paid by the assessee exceeds the tax payable by him on regular assessment, Govt. will payisimplerinterest on excessipayment @ 10%per G@HNUMD to be calculate i to the date of egularassessmen ‘but not more than 2 years. [Section 161] mated amount of advance tax? EB if any assesses feels, at any time during the year, that his taxis likely to b& dessithantthellaxtpayable 2s per iaw, then he may stibmitlanlestimate|tojthe|DCT and @aygestimated amount of @dvanceliax@accordingly. But at the time of assessment if the DCT found that his estimate is wrong and tax actually comes higher, then assessee will have to pay Simiplelinterest as per section 162. [Sec.155(5)] (7) What are the consequences in case of failure to pay advance tax? The consequences are as follows: - I. Assessee will be treated as an assesseelindefault. [Sec. 157] IL Simple GAfeFeSEN@M10% ‘perannumd will be chargeable on the a@mounit{ falls! short firomy!75% of thevassesseditax to be calculated from Ist July of the assessment year to the date of assessment but (Ghotimorelthan)2iyears. However, the rate of simple dnterest will be SO“higheP if the tetumlistotifiled onvoribefore the “Taxiday”) [section 162] i. DCTanayalso ifiposeipenalty up'to'l00% of the shortfall{sec. 269). (6) Is there any