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

Mehta Textiles Pvt. Ltd., a domestic company not opting for presumptive taxation, estimates its tax liability for tax year 2026-27 at Rs 8,00,000. TDS of Rs 1,00,000 is expected to be deducted from its receipts. Ignoring any shortfall, what is the amount of advance tax to be paid in the instalment falling due on 15 December 2026 (that instalment alone, not cumulative)?

The December instalment alone is Rs 2,10,000. Advance tax is Rs 8,00,000 less TDS Rs 1,00,000, which is Rs 7,00,000. The cumulative 75% due by 15 December less the 45% due by 15 September leaves 30%, which is Rs 2,10,000.

  1. ARs 2,10,000Correct
  2. BRs 3,15,000
  3. CRs 5,25,000
  4. DRs 2,40,000

Explanation

Advance tax is the estimated tax less TDS: 8,00,000 - 1,00,000 = 7,00,000. Cumulative percentages for a company are 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. The December instalment alone is 75% - 45% = 30% of 7,00,000 = Rs 2,10,000. Rs 3,15,000 is the cumulative 45% due by September and Rs 5,25,000 is the cumulative 75%, while Rs 2,40,000 is 30% of the gross Rs 8,00,000 and ignores TDS.

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