945(Income tax) How to compute and pay advance tax (Live)(Entire Concept)

• published: 13 Sep 2014
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945(Income tax) How to compute and pay advance tax (Live)(Entire Concept) Narration - By Amlan Dutta Video Link - https://www.youtube.com/watch?v=eGILb9YSptI&list;=UUzZ5hnmyR6qraHdI7PO9Thw Here we show how simple it is to pay advance tax . But we also go through the common mistakes that people make .For our study we assume Amlan's own case for previous year 2014 15 which comprises of FD interest income from axis bank at 10 lakhs rupees . He has no other income and made no eligible saving's (deductions under section 80 ) So his total income for the Previous year 2014 15 will be 10 lacs only This will be assessed by the assessing officer along with the return he will file in the year 2015 16, so the financial year 2015 16 is called the assessment year Now , the bank while paying amlan the FD interest income deducts some tax at income source (FD interest ) . The bank looks at section 194 A for guidance which prescribes the treatment of TDS on non security interest bearing instruments FD is a non security ( no bond , no debeture etc ) and bears interest So , the bank deducts 10 % i.e 1 lac rs and gives me rest This implies i have now tax credit of 1 lac available But understand that my tax liability at the end of the year is based on tax slabs on my total income So my tax liability will be governed by slabs presented byt the finance minister in the budget for year 2014 15 Say it is 0-2 lakhs - Nil , 2-5 lakhs -10 % - 5-10 lakhs 20 % and 10 lakhs and above 30 % Then it would be 1lakh 30 thousand plus edu cess at 3 % ...so it would be 133900 Now i have credit available of only 100000 Rs ...so what i need to do is meet out this balance 33900 by way of advance tax the department lays down dates and percentages ... By 15th sepetember 30 % , by 15th december 60 % and by 15th March 100% So , i compute 30 % of 33900 , figure out it is 10170 .... i need to pay this much as advance tax by sepetember 15th i pay it using challan 280 where i break it up further in income tax and education cess so , 97 % is income tax and 3 % is education cess so ,0.97 *10170 = 9865 Rs is what i pay as income tax so , 0.03 x 10170 =305 Rs is what i put as education cess (This income tax and edu cess together comprises my advance tax ) I get a challan receipt and later when i file the yearly return i take credit of this in tax paid details tab If i dont pay advance tax then penal interest under section 234 B/C becomes applicable at 1 % per month of unpaid taxes per month ( B from end of finacial year andf 2345 C from installement dates on underpaid installement ) For senior resident's , this is waived ---however if senior citizen(more than 60 years has income from business profession ), he will have to pay advance tax I explain many things ...your small thank you will make my day Jai Hind - i did my education to help people , not because i wanted to sell such a priceless attribute