• Advance tax on equity based capital gain

Should I pay advance tax on equity short term capital gain for a quarter and if I incur short term capital loss in next quarter and my yearly gain is zero then am I not loosing interest income on the amount which I paid as part of advance tax in first quarter of financial?
Asked 3 months ago in Capital Gains Tax from New Delhi, Delhi

Dear Sir,


Hope you are doing well !!


If your tax liability is more than Rs.10,000 then you are liable to pay advance tax by the end of the quarter.

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

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Ideally, advance tax is payable on the estimated total income for the entire year.  Where you envisaged a net loss at the end of year, then there is no loss of revenue to Tax department and hence no tax or interest liability.

Jasmina Jain Shah
CA, Greater Mumbai
361 Answers
4 Consultations

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Advance tax liability arises when the total tax exceeds Rs.10,000. You should pay advance tax in the quarter succeeding the capital gain. If it will be a loss then the advance tax paid will either be refunded or adjusted.

Vivek Kumar Arora
CA, Delhi
2942 Answers
144 Consultations

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Technically you need to pay advance tax quarter wise so if you dont pay it for quarter wise and in the end you dont have a loss you will have to pay interest for this period also.


Therefore if you are sure that you will have a loss then dont pay such tax. Its always better to pay advance tax and claim refund and you just need to pay 15% for now.


Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
1981 Answers
17 Consultations

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The advance tax calculation is made on a prediction basis. If you predict a future loss which could be set off with the income, you need not pay the advance taxes.

Lakshita Bhandari
CA, Mumbai
3545 Answers
174 Consultations

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Hello Sir,


Advance–tax is mandatory only if the net tax liability for the financial year (after considering TDS and tax relief) is Rs. 10,000/- or more. 

Karishma Chhajer
CA, Jodhpur
1286 Answers
7 Consultations

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Advance tax is required to be paid if the total tax liability exceeds  Rs. 10,000. You will have to pay it in installments during the year.

If at the end of the year your net tax liability is lesser than the advance tax paid, the excess amount will be refunded.

If you are worried about losing the interest income on the amount paid as advance tax, there is possibility of you paying interest on it in case you don’t pay due advance tax now.

I hope this answer satisfies your requirement.



CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Neemuch
794 Answers
1 Consultation

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