ITR
Advance tax on F&O profits
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Facts
If your total tax after TDS is ₹10,000 or more, advance tax is due in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Short payment brings interest under Sec 234B and 234C.
Provisions and law
- Sec 211 (now Sec 408)Advance tax instalments
- Sec 234B (now Sec 424)Interest for shortfall in advance tax
- Sec 234C (now Sec 425)Interest for deferment of instalments
Analysis
If you earn ₹10,00,000 of F&O profit by December and tax is ₹1,50,000, you should have paid 75%, ₹1,12,500, by 15 December. Paying everything in March brings Sec 234C interest for earlier instalments. Unlike presumptive filers, traders on regular books do not get the single instalment option.
Conclusion
- Estimate profit before each instalment date
- Pay the cumulative percentage due
- Adjust for losses later in the year
- Claim all challans in the return
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