Conditions of liability to pay advance tax
[Section-404 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Advance tax shall be payable by the assessee during a tax year, where the amount of such tax during that year, as computed under this Part, is ten thousand rupees or more.
FAQs on Section 404 of Income Tax Act 2025
What is the threshold amount of tax liability that requires payment of advance tax under Section 404?
Advance tax is payable if the tax liability during a tax year, as computed under this Part, is ten thousand rupees or more.
Who is required to pay advance tax under the Income Tax Act, 2025?
Any assessee whose computed tax liability during a tax year is ₹10,000 or more is required to pay advance tax.
From when is Section 404 effective?
Section 404 is effective from 1st April, 2026.
Is advance tax applicable to all assessees irrespective of their type?
Yes, advance tax applies to any assessee if the tax payable exceeds the threshold specified, unless specifically exempted under other provisions of the Act.
Is the ₹10,000 threshold inclusive of all taxes or only income tax?
The threshold of ₹10,000 pertains to the amount of tax computed under this Part of the Act, which typically refers to income tax.
If my tax payable during the year is ₹9,999, am I liable to pay advance tax?
No, advance tax is payable only if the tax liability is ₹10,000 or more.
How is the tax liability determined for the purpose of advance tax under Section 404?
The tax liability is computed in accordance with the provisions contained under the applicable Part of the Act.
Does Section 404 mention any due dates for advance tax payments?
No, Section 404 only specifies the condition of liability to pay advance tax. Due dates are likely covered under a different section.
What happens if I fail to pay advance tax when liable under Section 404?
Failure to pay advance tax when liable may attract interest or penalties under the relevant provisions of the Income Tax Act, 2025.
Is the ₹10,000 threshold fixed, or can it be changed?
As per Section 404, the threshold is ₹10,000. Any change would require legislative amendment to the Act.
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