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

Lakshmi Textiles Pvt Ltd, a domestic company, estimates that its tax liability for tax year 2026-27 will be ₹8,00,000, with no TDS or TCS credits. It does not opt for presumptive taxation. What is the minimum cumulative advance tax it must have paid by 15 September 2026 to avoid a shortfall in that instalment?

The company must have paid a cumulative ₹3,60,000 by 15 September 2026. For a non-presumptive assessee, 45% of the estimated advance tax is due by 15 September, and 45% of ₹8,00,000 is ₹3,60,000. The 15% (₹1,20,000) figure belongs to the 15 June instalment.

  1. A₹1,20,000
  2. B₹2,40,000
  3. C₹3,60,000Correct
  4. D₹6,00,000

Explanation

For a non-presumptive assessee, cumulative advance tax is 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. 45% of ₹8,00,000 = ₹3,60,000. ₹1,20,000 is the 15 June figure (15%), and ₹6,00,000 is the 15 December figure (75%).

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