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

Mr. Joshi, a resident individual, runs a small retail business and is taxed under the presumptive scheme for eligible businesses. His tax liability for tax year 2026-27 is ₹48,000 and no TDS applies. He pays the entire ₹48,000 on 10 March 2027. Which statement is correct?

Mr. Joshi has complied. An assessee under the presumptive scheme for eligible businesses need pay advance tax only as a single instalment on or before 15 March of the tax year. His payment on 10 March 2027 is on time, so no instalment-default interest arises.

  1. AHe is liable to interest for default in paying the 15 June, 15 September and 15 December instalments
  2. BHe has complied with the advance tax rule, as an eligible presumptive assessee may pay the whole advance tax in one instalment on or before 15 MarchCorrect
  3. CHe should have paid 100% by 15 December 2026, so interest applies for three months
  4. DHe is not required to pay advance tax at all, as presumptive assessees are exempt

Explanation

An assessee under the presumptive scheme for eligible businesses has to pay the whole advance tax in a single instalment on or before 15 March of the tax year. Payment on 10 March 2027 is within time, so no instalment-default interest arises. The quarterly pattern applies to other assessees and is the key trap here.

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