Advance tax

Recently i read that Supreme Court has issued notice to PRICE WATERHOUSE COOPERS on Advance tax ....Facts of the case is THOUGH PWC was subject to TDS U/S195 of the Income Tax Act was not liable to pay advance tax.But here Supreme court has given decision that "ALL TAX PAYERS ARE REQUIRED TO PAY ADVANCE TAX IN SPITE OF THE FACT THAT MOST INCOME IS SUBJECT TO TDS OR IS TAX FREE.AS PER SECTION 208 of the act if the tax payable is Rs.5000 or more,advance tax is payable in 3 installments during each AFinancial Year.

Now here i hav a question that as per sec.209(1)(d) of the I.T.Act it states "....the income tax calculated under cl.(a),(b),(c) shall ,in each case, be reduced by the amount of income tax which would be deductible (or collectible) at source during the financial year under any provision of this act from any income.....and the amount of income tax as so reduced shall be the advance tax payable."

My doubt is about my company whether i must pay advance tax or not?as my co. is subject to so many TDS that i am suppose to receive ... do u think still i shall pay Advance Tax ?

where at one side Supreme Court is of the view to pay tax irrespective of the fact that u r subject to TDS/Tax free WHERE AS as per Act it gives contradictory view.....what should be done in this case.kindly give ur opinion...





Advance tax is payable only if there is still a tax liability above the limit (Rs 10000 wef 1-4-2009) after adjusting TDS/ TCS against the gross estimated tax liability. So if TDS exceeds the estimated tax libility and a refund is expected as stated by you, there is no need to pay any advance tax.


The full facts of the case have not been narrated, however, it appears that the TDS might not have been deducted and PWC might have taken a stand that sice its receipts were liable to be subjected to TDS, it was not required to pay Advance Tax.


Thank you Vineet & Amit for your feedback. After I posted this query i tried to search for the facts of the case.All I could find out was:"

NEW DELHI: The Supreme Court on Monday sought reply from PriceWaterhouseCoopers as to why the non-resident company should not pay advance tax on fee charged by it for providing services in India.

A bench headed by Justice S H Kapadia issued notice to PriceWaterhouseCoopers (PWC), being a non-resident firm, on an appeal filed by the Income Tax department seeking the apex court's interference on the issue whether other statutory provisions charging interest can be applied to the assessee which had failed to pay advance tax.

The department has challenged the sectoral tribunal's ruling which held that PWC was not liable to pay advance tax even if the entire payment made to it by its clients in India was subject to TDS under Section 195 of the Income Tax Act.

It had also sought the apex court's directions on whether an assessee like PWC whose entire taxable receipts were subject to TDS was liable to pay advance tax and if the same was paid then whether interest was chargeable on it under Section 234A, 234B and 234C of the Act.

The US-based accountancy and consultancy firm had disclosed consultancy fee aggregating to more than Rs 5.88 crore during 2001-02 arising from various services rendered to its clients in India.

PWC, a limited liability partnership firm, had filed return declaring total income of Rs 5.88 crore on which the tax was worked out to be more than Rs 2.02 crore.

In its computation of income filed along with income return, the assessee had adjusted the amount of TDS aggregating to more than Rs 1.47 crore and the shortfall of tax of Rs 66.64 lakh inclusive of interest was deposited under Section 140A.

Supreme Court clears decks for PwC prosecution


Press Trust Of India / New Delhi July 13, 2009, 0:48 IST


The Supreme Court has left it open to the government to prosecute reputed chartered accountant firm PricewaterhouseCoopers Pvt Ltd for alleged errors in computing its taxable income for 2000-01.

A Bench headed by Justice S H Kapadia has given a free hand to the government to decide whether it wanted to go ahead with the criminal prosecution of the firm even after it paid the penalty and was not seeking refund.


The Bench asked Additional Solicitor General Parag Tripathi to look into the matter and seek instructions from the government on the issue.

The Calcutta High Court, on PwC’s appeal, had held that the firm had failed to furnish its true and correct particulars of accounts while filing the returns. The High Court had also upheld the penalty imposed by the authorities at 100 per cent of the tax alleged to be evaded."

So after reading this post I have my mind clear about Advance Tax.Thank you for your kind attention.




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