Report No. 12

217. Computation of advance tax.-

Subject to the provisions of section 215(3), [sub-clause newly added re: advance tax on dividends] the amount of advance tax payable by an assessee in the financial year shall be computed as follows:-

[New]

(a) (i).......his total income of the latest previous year in respect of which he has been assessed shall first be ascertained:

[Section 18A(1)(a), main para., earlier half, part]

(ii) so much of such total income as consists of income which was or could have been subject to advance tax in that previous year shall next be ascertained;

(iii) income-tax and super-tax shall then be calculated on the last mentioned income at the average rate of income-tax and the average rate of super-tax respectively applicable in the financial year to the total income determined for the said previous year;

[Section 18A(1)(a), main para., latter half, part]

(iv) the sum total of income-tax and super-tax so calculated shall, subject to the provisions of clauses (b) and (c), be the advance tax payable;

(b) in cases where under the provisions of section 124(2). or 124 (3) [section 17(1) 1st Proviso], the tax payable by the assessee is to be determined with reference to his total world income, the advance tax payable by him shall bear to the total amount of income-tax and super-tax which would have been payable on his total world income of the said previous year had it been his total income the same proportion as the amount of the income subject to advance tax which is included therein bears to his total world income;

[Section 18A(1)(a), main para., latter half, part]

(c) in cases where an estimate is sent by the assessee under section 220(1) or 220(2) [18A(2)] or section 220(3) [18A(3)] the total income so estimated shall, for the purposes of calculation of tax under this section, be substituted for the total income referred to in clauses (a) and (b), and the income subject to advance tax so estimated shall be substituted for the income to be ascertained under item (ii) of clause (a).

Explanation.- If the assessse is a partner of a registered firm and an assessment of the firm has been completed for a previous year later than the latest previous year for which the assessee's assessment has been completed, his share in the income of the firm shall, for the purposes of clauses (a) and (b), be included in his total income on the basis of the said assessment of the firm.

[Section 18A(1), 2nd proviso]