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    Advance Payment of Tax

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    aminalex122
    The document discusses advance payment of tax in Bangladesh. It outlines who must pay advance tax, how the payments should be calculated, the payment deadlines and amounts, and consequences for failing to make required advance tax payments.

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    Advance Payment of Tax

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    aminalex122
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    The document discusses advance payment of tax in Bangladesh. It outlines who must pay advance tax, how the payments should be calculated, the payment deadlines and amounts, and consequences for failing to make required advance tax payments.

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    Advance Payment of tax

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    The document discusses advance payment of tax in Bangladesh. It outlines who must pay advance tax, how the payments should be calculated, the payment deadlines and amounts, and consequences for failing to make required advance tax payments.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    10 views2 pages

    Advance Payment of Tax

    Uploaded by

    aminalex122
    The document discusses advance payment of tax in Bangladesh. It outlines who must pay advance tax, how the payments should be calculated, the payment deadlines and amounts, and consequences for failing to make required advance tax payments.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    ADVANCE PAYMENT OF TAX

    Ranjan Kumar Bhowmik rcMA


    Former Member
    National Board of Revenue

    Advance income tax is the tax which is to be paid by the assessee in advance
    either by deduction or collection of tax at source or by payment of quarterly
    instalments.

    (1) Who is liable to pay advance tax?


    Both existing and new assesses are liable to pay advance income tax. In case of
    existing assessee if his last assessed total income exceeds TK. 600,000. At the
    time of considering last assessed income the following income will be excluded:
    [a] capital gain
    |b] any one-time income which is non-recurring in nature.
    However, any assessee who's only source of income is agriculture and if that
    agricultural income does not exceed Tk. 8,00,000 he will not have to pay any
    advance tax. [section 154]
    (2) What is the basis on which advance paymentsshould be calculated?

    In case of existing assessee:

    In case of existing assessee, advance tax is to be calculated on the basis of his


    last assessed income. If his last assessed total income exceeds Tk. 600,000/
    [excluding capital gain and one-time income. [See-154]
    In case of new asseSsee:

    A new assessee who has not previously been assessed shall also require to
    pay
    advance tax if his current year's income [excluding capital gain and one-time
    income] is likely to exceed Tk. 600,000/ [See. 156]
    (3) When and how advance tax is to be paid?

    Advance tax is to be paid in the following 4 equal instalments on the basis of


    financial year for which the tax is payable: [section 155]

    Advance Tax prepared by Ranjan Kumar Bhowmik FCMA as amended up to 03/7/2023 based on Income Tax Act,2023 Page I of2
    Ist instalment 15th September
    2nd instalment 15th December

    3rd instalment 15th March


    4th instalment 15th June

    advance tax?
    (4) Whether withholding tax at source will be treated as

    Yes, withholding tax is also to be treated as advance payment of tax. (Sec. 155]
    (5) What will happen in case of excess payment of advance tax?

    If the advance tax paid by the assessee exceeds the tax payable by him on
    regular assessment, Govt. willpay simple interest on excess payment @10% per
    annum to be calculated from 1t July of the respective assessment year to the
    date of regular assesSment but not more than 2 years. [Section 161]
    (6) Is there any scope to pay estimated amount of advance tax?
    Yes, if any assessee feels, at any time during the year, that his tax is likely to be
    less than the tax payable as per law, then he may submit an estimate to the DCT
    and pay estimated amount of advance tax accordingly. But at the time of
    assessment if the DCT found that his estimate is wrong and tax actually comes
    higher, then assessee will have to pay simple interest as per section 162.
    [Sec.155(5)]
    (7) What are the consequences in case of failure to pay advance tax?

    The consequences are as follows:


    I. Assessee will be treated as an assessee in default. [Sec. 157]
    II. Simple interest @ 10% per annum will be chargeable on the
    amount falls short from 75% of the assessed tax to be calculated
    from lst July of the assessment year to the date of assesSment but
    not more than 2 years. However, the rate of simple interest will be
    50% higher if the return is not filed on or before the "Tax day"
    [section 162]
    III. DCT may also impose penalty up to l00% of the shortfall[Sec. 269).

    Advance Tax prepared by Ranjan Kumar Bhowmik FCMA as amended up to 03/7/2023 based on Income Tax
    Act,2023 Page 2 of2

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