Section 211 of ITA, 1961 : Section 211: Instalments Of Advance Tax And Due Dates

Explanation using Example

Imagine a scenario where Mr. Sharma, a salaried employee, also earns income from freelance consulting. His total tax liability for the upcoming financial year is estimated to be ₹100,000. According to Section 211 of the Income-tax Act, 1961, he is required to pay advance tax in four instalments:

• By 15th June, he should pay at least ₹15,000 (15% of ₹100,000).
• By 15th September, he should pay an additional amount such that the total paid is at least ₹45,000 (45% of ₹100,000), which means paying ₹30,000 more if he paid exactly ₹15,000 in the first instalment.
• By 15th December, he must ensure that at least ₹75,000 (75% of ₹100,000) has been paid in total. This means if he has followed the exact percentages, he should pay another ₹30,000.
• Finally, by 15th March, he should settle the entire tax liability, so if he has been paying the exact percentages, he should now pay the remaining ₹25,000.

If Mr. Sharma fails to receive the notice of demand for advance tax by the 15th June, and receives it only on 1st July, he is still liable to pay the advance tax. However, the instalments will be adjusted according to the date he received the notice. So, his payments due after 1st July would be calculated based on the notice, and he would need to pay the appropriate portions of his tax liability by the subsequent due dates after the notice is served.