Eminent Advance Tax Pronouncements


The Direct Taxation system in India is one of its kinds and includes its fair share of interesting and complex provisions and sections to be reckoned with. The concept of Advance Tax being one such provision includes depositing tax on income in advance by estimating the projected earnings for the year and then paying taxes accordingly on time-bound intervals instead of lump sum payments at year-end.

Section 208 of the Income Tax Act, 1961 includes the provisions pertaining to Advance Income Tax which stipulates that where total income tax liability is greater than INR 10,000 then tax is to be deposited under Challan 280 via online or offline mode with designated banks to the Income Tax Department. Interestingly, the concept of paying taxes online in India is on the rise as more than 85% of transactions are now done online.

The concept of Advance tax has been helping both the government and the taxpayers as there is a lesser chance of default in tax payments and collections which ultimately expedites the revenue collection mechanism of the Government. In fact, the Government can earn additional interest on advance receipt of taxes. In addition to that, it eases the burden of the taxpayers as taxes are paid in instalments and not in the lump sum. Thus, helping the government, businesses and individual taxpayers in managing their revenue and finances systematically.

As per Income Tax Rules 2018 the due date for payment of Advance Tax is:
  • ·         15% advance tax, on or before 15th June
  • ·         45% advance tax, on or before 15th September
  • ·         75% advance tax, on or before 15th December
  • ·         100% advance tax, on or before 15th March or closing of FY
A few Important Case Laws relating to Advance Tax have been summarised below:
  • M/s. MRF Ltd v/s the DCIT, 2016: The fact that an unanticipated income accrued in the last financial year cannot be a ground not to pay advance tax.
  • CIT v/s Sh. Surinder Kumar Khindri, 2017: The assessee was held to be entitled to an adjustment of cash seized against advance tax dues to be paid.
  • Premlata Jalani v/s Asst. CIT, 2002: Interest u/s 234C would be payable only for the months till which advance tax was not paid.
  • Rolta India Ltd. (SC): Interest under sections 234B and 234C shall be payable on the failure of the company to pay advance tax in respect of Minimum Alternate Tax.


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