Advance Tax in India to be paid by all Assessee’s
Introduction
Advance tax in
India is a system of paying income tax periodically throughout the financial
year, rather than waiting until the end of the year. It's applicable to
individuals, professionals, and businesses whose tax liability for the year is
Rs. 10,000 or more.
 |
| due dates of Advance tax, Calculations of Advance tax |
Here's how it
works:
1.
Payment Schedule: There are specific
due dates for payment of advance tax during the financial year. For individuals
and non-corporate taxpayers, it's generally divided into four installments,
while for corporate taxpayers, it's usually paid in four installments as well.
Due Dates of
advance Tax for all Assessee’s
|
Due Date |
Amount of Advance tax |
Important |
|
Upto 15th June of P.Y |
Upto 15% of advance tax liability |
If advance tax optes for sec 44AD/ADA (Presumtive PGBP) then due date
is 15th March of P.Y ( 100% of Advance tax in 1 instalment) |
|
Upto 15th Sept of P.Y |
Upto 45% of advance tax liability |
|
|
Upto 15th Dec of P.Y |
Upto 75% of advance tax liability |
|
|
Upto 15th Mar of P.Y |
Upto 100% of advance tax liability |
|
|
Note: Tax Paid Upto 31st March pf P.Y is treated as advance
Tax |
||
2. Calculation:
Taxpayers estimate their income for the year and calculate the tax liability accordingly.
They then pay a portion of this estimated tax liability in each installment.
3. Penalties:
Failure to pay advance tax or underpayment of it may attract penalties.
Interest is charged under sections 234B and 234C of the Income Tax Act.
4. Modes of
Payment: Advance tax can be paid online through the income tax department's
website or physically at designated banks.
5. Adjustment
and Refunds: Any excess payment made as advance tax is adjusted against the
final tax liability for the year. If there's still an overpayment, it's
refunded to the taxpayer.
Advance tax helps
in the smooth collection of taxes for the government and prevents a huge tax
burden on taxpayers at the end of the financial year. It also aids individuals
and businesses in better financial planning and management.