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CA Intermediate · Taxation · Tax Deduction or Collection at Source and Advance Tax

Karthik, a resident trader, declares his business income under a presumptive taxation scheme for tax year 2026-27. His estimated tax liability is Rs 90,000 and TDS of Rs 20,000 is expected on his receipts. What amount of advance tax must he pay, and by when, to avoid interest for deferment of advance tax?

Karthik must pay Rs 70,000 in one instalment on or before 15 March 2027. Presumptive-scheme assessees have a single advance tax date, and the amount is tax of Rs 90,000 reduced by expected TDS of Rs 20,000.

  1. ARs 70,000 in a single instalment on or before 15 March 2027Correct
  2. BRs 90,000 in a single instalment on or before 15 March 2027
  3. CRs 31,500 on or before 15 September 2026 and the balance by 15 March 2027
  4. DRs 52,500 on or before 15 December 2026 and the balance by 15 March 2027

Explanation

An assessee under the presumptive scheme pays the entire advance tax in one instalment on or before 15 March. Advance tax is the tax liability less TDS: 90,000 - 20,000 = Rs 70,000. Rs 90,000 ignores the TDS credit. The other options apply the 45% and 75% instalment pattern (45% of 70,000 = 31,500; 75% = 52,500), which applies to non-presumptive assessees.

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