Ajay a resident individual aged 32 years, sold a plot of land on 17th March 2025. LTCG on such sale amounted to ₹5,00,000. Since he had no other income during PY 2024-25, he did not pay any advance tax instalment. You ar

As per the provisions of advance tax, an assessee requires to estimate his income in advance and discharge his advance tax liability in specified instalments. However, it is not possible to estimate the amount of capital gains. Therefore, no advance tax is payable on estimated basis and is to be paid on actual basis in respect of capital gains. Computation of Advance tax payable by Mr. Ajay: The total income of ₹5 lakhs comprises only of LTCG on sale of plot on 20th March 2025. Therefore, while calculating the tax liability of Mr. Ajay, he would be entitled to the benefit of deficiency in normal income as well as rebate u/s 87A. Particulars (₹) Tax @ 12.5% on LTCG of 2,50,000 (5 lakh- 2.5 lakh) 31,250 Less: Rebate (12,500) Tax after Rebate 18,750 Add: HEC @ 4% 750 Total 19,500 Since, Mr. Ajay has sold the plot of land on 17th March 2025, LTCG on transfer of such land arises only after the due date of fourth instalment (i.e., 15th March 2025). It is stated in the proviso to section 234C that if the capital gains arise after due dates of payment of all instalments of advance tax, then the advance tax on such income shall be paid on or before 31st March of the Previous Year. Further, in order to avoid interest liability u/s 234B, it is advisable that Mr. Ajay pays the tax of ₹19,500 on such LTCG on or before 31st March 2025.