How to Prepare Anticipatory Income Tax Statement?

To find out the taxable income and the tax to be paid for the financial year, the government servants calculate the anticipated income of a financial year. One 12th of the tax amount is deducted from the salary each month. This system prevails for a long time. But this was not followed properly by most of the govt servants. Now the finance department has published a circular regarding implementation of 8+4 EMI Model for the remittance of income tax based on the salary amount drawn by the govt servants.

What is 8+4 EMI Model?
Let us take the 12 months of a financial year as two parts – the first 8 months and the next 4 months. The first premium of income tax is usually deducted from the salary of March in a financial year. The deduction of same amount of tax premium would continue in the following 8 months if there are no other changes. We would get a clear idea of the income of the present financial year after 8 months. There may be changes in the salary income that was in the month of March. Hence it is preferred to make calculations again including the changes. Most of us have experienced the difficulty of paying a huge amount towards tax in the month of February for not revising our anticipatory income and tax. So, a revised anticipatory statement can be prepared after 8 months and tax deduction can be done based on the new amount.

Gross salary including basic salary, allowance, perquisites is calculated and deductions from 80 C to 80 U, housing loan interest, professional tax etc are lessened from the total salary income to calculate the tax amount. As per the anticipatory income statement, one 12th of tax should be deducted in the salary bill of every month. If the income tax amount is not deducted from the income sources, 1% interest and 1.5% of interest for not being paid the tax amount should be remitted. Penalty can be levied upon the defaulters and those who reduce the amount that is to be deducted. When there is an increase in the total salary amount due to salary hike or interest or other allowances, the govt servants should give a revised anticipatory statement and revised income tax amount ought to be deducted from the salary of the following months.

Revised Tax Rates
The prominent change in the tax amount of this current financial year is that those with more than 2.5 lakh to 5 lakh salary would pay 5% instead of earlier 10% where as it would be 20% for more than 5 lakh to 10 lakh salary drawers and 30% for more than 10 lakh as it was done early. Another change has been done in the rebate amount. It has been lessened from Rs.5000 to Rs.2500 for those with income below 5 lakh according to section 87A. Moreover , the income is limited to 3.5 lakh to become beneficiary of this. Here ‘income’ means the income amount after all deductions are done.

Anticipatory Income Tax Software
Various software tools given here can be made use of, for preparing anticipatory income tax statement.

Anticipatory Income Tax Software for 2017-18- Ms Access Utility Prepared by Alrahiman
Anticipatory Income Tax Statement-Help File by Alrahiman
Anticipatory Income Tax Software for 2017-18- Ms Excel Utility Prepared by Sobhan S
Anticipatory Income Tax Software for 2017-18- Ms Excel Utility Prepared by Babu Vadukkumchery
Anticipatory Income Tax Software for 2017-18- Ms Excel Utility Prepared by Safeeq M.P: Software | Help File
Income Tax Software Tools

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