CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 219 - Credit for Advance Tax
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Live. The provision giving credit for advance tax paid against the assessed liability.
Finance Act, 2026: No amendment.
Mechanism: Any sum (other than penalty or interest) paid or recovered as advance tax is treated as payment of tax for the relevant previous year, and credit is given in the regular assessment.
Litigation profile: Settled by Modi Industries; live and routine, with a defined interface to the interest computation under section 234B.
A. SECTION COMMENTARY
Section 219 completes the advance-tax cycle by directing how the sums paid are to be treated. Any amount - other than a penalty or interest - paid by, or recovered from, an assessee as advance tax under the Chapter is to be treated as a payment of tax in respect of the income of the relevant previous year, and credit for it is to be given to the assessee in the regular assessment. The section converts the provisional advance-tax collection into a credit against the finally assessed liability; it is the provision that gives the assessee the benefit of what he has paid in advance.
Credit, and the date from which advance tax is treated as tax paid
Section 219 was central to the Supreme Court's reconstruction of the scheme in Modi Industries. The Court held that advance tax (and tax deducted at source) is treated as payment of tax in respect of the relevant income, and worked out the date from which that credit operates for the purpose of computing interest - both the interest payable by the Government on excess advance tax (section 214) and, in the successor regime, the interest payable by the assessee on shortfall (section 234B). The credit under section 219 is given in the 'regular assessment', which - consistently with section 214/215 - means the first assessment under section 143/144.
Penalty and interest excluded
By its own terms, section 219 gives credit only for amounts paid as advance tax; sums paid by way of penalty or interest are excluded and are not advance-tax credits. The provision is live and operates in every assessment in which advance tax has been paid; in the present scheme it works together with section 140A (self-assessment tax), the TDS/TCS credit provisions and section 234B (which measures shortfall after giving credit for advance tax under section 219).
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
219. Any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax in pursuance of this Chapter shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the assessment year next following the financial year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment. D.—Collection and recovery
C. AUTHORITIES
Section 219 is live and operates in every assessment involving advance tax; its construction is settled by Modi Industries. The authorities are arranged by (1) credit and the date of payment, and (2) the interface with the interest computation. All citations have been web-verified.
Cluster 1 - Credit for advance tax and the 'regular assessment'
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Issue: How advance tax (and TDS) is to be treated and credited under section 219, and the date from which it operates as payment of tax for interest purposes.
Held: Advance tax paid (and tax deducted at source) is treated, under section 219, as payment of tax in respect of the relevant income, and credit is given in the regular assessment - the first assessment under section 143/144. The Court worked out the consequences of that credit for the computation of interest under section 214 (and, by parity, the successor provisions).
Significance: The governing authority on the operation of section 219 and on the meaning of 'regular assessment' in which credit is given.
Cluster 2 - Interface with the interest computation
CIT v. Ranchi Club Ltd. (2001) 247 ITR 209 (SC)
Relevance: Interest for shortfall in advance tax (now section 234B) is computed on the tax on the returned income after credit for advance tax under section 219; the credit reduces the base on which shortfall interest is worked.
Use: Connects the section 219 credit to the measurement of shortfall interest.
CIT v. Bhagat Construction Co. (P) Ltd. (2018) 404 ITR 187 (SC)
Relevance: The interest computation (in Form ITNS-150) that follows the section 219 credit is part of the assessment order and is automatic once the statutory conditions are met.
Use: Shows how the section 219 credit feeds the automatic interest computation in the assessment.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 219 - Credit for Advance Tax
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Live. The provision giving credit for advance tax paid against the assessed liability.
Finance Act, 2026: No amendment.
Mechanism: Any sum (other than penalty or interest) paid or recovered as advance tax is treated as payment of tax for the relevant previous year, and credit is given in the regular assessment.
Litigation profile: Settled by Modi Industries; live and routine, with a defined interface to the interest computation under section 234B.
A. SECTION COMMENTARY
Section 219 completes the advance-tax cycle by directing how the sums paid are to be treated. Any amount - other than a penalty or interest - paid by, or recovered from, an assessee as advance tax under the Chapter is to be treated as a payment of tax in respect of the income of the relevant previous year, and credit for it is to be given to the assessee in the regular assessment. The section converts the provisional advance-tax collection into a credit against the finally assessed liability; it is the provision that gives the assessee the benefit of what he has paid in advance.
Credit, and the date from which advance tax is treated as tax paid
Section 219 was central to the Supreme Court's reconstruction of the scheme in Modi Industries. The Court held that advance tax (and tax deducted at source) is treated as payment of tax in respect of the relevant income, and worked out the date from which that credit operates for the purpose of computing interest - both the interest payable by the Government on excess advance tax (section 214) and, in the successor regime, the interest payable by the assessee on shortfall (section 234B). The credit under section 219 is given in the 'regular assessment', which - consistently with section 214/215 - means the first assessment under section 143/144.
Penalty and interest excluded
By its own terms, section 219 gives credit only for amounts paid as advance tax; sums paid by way of penalty or interest are excluded and are not advance-tax credits. The provision is live and operates in every assessment in which advance tax has been paid; in the present scheme it works together with section 140A (self-assessment tax), the TDS/TCS credit provisions and section 234B (which measures shortfall after giving credit for advance tax under section 219).
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
219. Any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax in pursuance of this Chapter shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the assessment year next following the financial year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment. D.—Collection and recovery
C. AUTHORITIES
Section 219 is live and operates in every assessment involving advance tax; its construction is settled by Modi Industries. The authorities are arranged by (1) credit and the date of payment, and (2) the interface with the interest computation. All citations have been web-verified.
Cluster 1 - Credit for advance tax and the 'regular assessment'
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Issue: How advance tax (and TDS) is to be treated and credited under section 219, and the date from which it operates as payment of tax for interest purposes.
Held: Advance tax paid (and tax deducted at source) is treated, under section 219, as payment of tax in respect of the relevant income, and credit is given in the regular assessment - the first assessment under section 143/144. The Court worked out the consequences of that credit for the computation of interest under section 214 (and, by parity, the successor provisions).
Significance: The governing authority on the operation of section 219 and on the meaning of 'regular assessment' in which credit is given.
Cluster 2 - Interface with the interest computation
CIT v. Ranchi Club Ltd. (2001) 247 ITR 209 (SC)
Relevance: Interest for shortfall in advance tax (now section 234B) is computed on the tax on the returned income after credit for advance tax under section 219; the credit reduces the base on which shortfall interest is worked.
Use: Connects the section 219 credit to the measurement of shortfall interest.
CIT v. Bhagat Construction Co. (P) Ltd. (2018) 404 ITR 187 (SC)
Relevance: The interest computation (in Form ITNS-150) that follows the section 219 credit is part of the assessment order and is automatic once the statutory conditions are met.
Use: Shows how the section 219 credit feeds the automatic interest computation in the assessment.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.