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CMA Intermediate · Direct and Indirect Taxation · Self-Assessment and Intimation

Ravi Traders was regularly assessed for tax year 2024-25 on total income of Rs 12,00,000. For a later tax year it furnished a return showing total income of Rs 15,00,000. The Assessing Officer issues an order under section 407(1) of the Income-tax Act, 2025. What is the 'specified sum' on which advance tax is to be calculated?

The specified sum is the higher of the total income of the latest regularly assessed year and the total income returned in any later year's return. Here that is Rs 15,00,000, since the returned income exceeds the assessed Rs 12,00,000.

  1. ARs 12,00,000, the assessed income
  2. BRs 15,00,000, the higher of the two figuresCorrect
  3. CRs 27,00,000, the sum of both figures
  4. DRs 13,50,000, the average of both figures

Explanation

Under section 407(3), the specified sum is the higher of (a) total income of the latest regularly assessed tax year and (b) total income returned for any subsequent tax year. Here Rs 15,00,000 exceeds Rs 12,00,000. Using only the assessed income ignores clause (b).

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