Advance tax on equity based capital gain

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.

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.

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.

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.

Hi

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.

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. 

Hello,

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.

Regards,

CA Hunny Badlani