Assessment Procedures, TDS/TCS, Advance Tax and Return Filing
What the exam tests
This domain tests the compliance cycle: assessment types, return filing, tax deduction and collection at source, advance tax instalments, interest for defaults, and the difference between withholding tax and final tax liability.
Core rules
- Assessment: Self-assessment under Section 140A; summary assessment under Section 143(1); scrutiny assessment under Section 143(3); best judgment assessment under Section 144; and reassessment in specified cases.
- Returns: Due dates depend on the assessee and audit status; a non-audit individual is generally due by 31 July, an audited assessee by 31 October, and a transfer-pricing case by 30 November. Belated and revised returns are governed by statutory time limits.
- TDS/TCS: The deductor deposits tax by the 7th of the following month, with April to February deducted amounts; March deductions are generally deposited by 30 April. Quarterly statements and certificates are issued in the prescribed forms.
- Advance tax: Payable if tax liability is ₹10,000 or more. Cumulative instalments are 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Presumptive assessees pay 100% by 15 March.
- Interest: Sections 234B and 234C apply for short payment and deferment of advance tax.
Worked example
Estimated tax for the year is ₹1,00,000. The assessee pays ₹15,000 by 15 June, ₹30,000 by 15 September, ₹30,000 by 15 December and ₹25,000 by 15 March. Cumulative payments are ₹15,000, ₹45,000, ₹75,000 and ₹1,00,000, matching 15%, 45%, 75% and 100% of the liability.
Traps
TDS is not a final tax; it is adjusted against the assessed liability. Advance tax is not the same as TDS. Missing an instalment can attract 234C even if the total tax is paid by year-end. Return due dates are not uniform for all assessees.