Capital gain.. payment of advance tax

This query is : Resolved

Ajay (Querist)
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12 February 2013 sir i have purchased a land n sold same on 15.Jan.2013 ..
and the LTCG on same is approx 4 crore..
now on 10 feb.. AO invited me n is forcing me to submit due capital gain tax till feb end..

AO is not even giving me time to pay advance tax till 15 march..

and i m interested in paying Self asstt.tax wit due interest.. n mean while i wanna use the same for some other purpose..

can AO force me to pay advance tax only..
is it justified.. i m ready to pay tax amt after 4 Month wit due interest thereon.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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12 February 2013 No. Ajay the AO can't force you.

Anand

Anand (Expert)
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13 February 2013 The law requires that you pay your advance tax within the installment dates specified.
The AO can certainly force you by virtue of Section 210, in which case he will have to issue a notice to you before 28th February. He will give you the calculation of how much he expects you to pay and raise a notice of demand u/s 156 whihc you will have to comply with.
If you dont you will be considerd an "assessee in default" and all consequences including attachment of bank account can follow.

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Anand

Anand (Expert)
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13 February 2013 you may intimate to him that you intend to invest the same in Capital Gains Bond Scheme. and later state that you have changed your mind and pay the tax.
but this will be only upto one crore. fifty lakhs in this year and fifty lakhs in this next year.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 February 2013 Dear Ajay and Anand,

Anand is right that AO can issue notice under 210 for the payment of advance tax.

However, the notice has to in any given case, follow the procedure of computation of advance tax as laid down in section 209.

209 states that for making an order under 210(3), assessing officer may compute advance tax on higher of any assessed income in any previous year.

Thus, AO can't consider the capital gains earned in the current year for computation of advance tax payable.

Ajay you shall always have the right to refusal to pay advance tax on the capital gains. However, you shall be liable to pay interest under 234 for late payment of advance tax.