Advance Tax Definition and Due Dates
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An advance tax is a tax that an assessee needs to pay as they earn, also known as the “pay as you earn” tax. A person can pay it , before the end of the fiscal year. The income tax paid for income earned during the same financial year is referred to as the “Advance Tax Payment.” In general, taxpayers are only obligated to pay tax on their previous year’s earnings. The Income Tax Act of 1961 includes a provision for advance tax to guarantee that money reaches the government as soon as possible.
According to Section 208 of the Income Tax Act 1961, every person whose estimated tax due for the financial year exceeds Rs. 10,000 is required to pay tax in advance. Individuals and business owners should pay these instalments by the Income Tax Department’s deadlines.
Who should be responsible for paying the advance tax?
Salaried people are exempt from paying advance tax because their employers deduct it at source (TDS). However, it must be paid if an assessee has any other earnings apart from salary income for which tax has not been deducted at source and the tax liability exceeds Rs.10000. Professionals (self-employed), businessmen, and firms, on the other hand, will be required to pay taxes in advance because their taxable income often surpasses the advance tax payment standard.
When should you make an advance payment of income tax?
The advance tax payment is due in instalments on the dates listed below:
In the case of a non-corporate assessee
By 15th June Nil
By 15th September 30%
By 15th December 60%
By 15th March 100%
In the case of a corporate assessee
By 15th June 15%
By 15th September 45%
By 15th December 75%
By 15th March 100%
How can I pay an advance payment of income tax?
People can pay it at bank branches approved by the Income Tax Department using tax payment challans. It is possible to deposit it with the Reserve Bank of India as well as all other authorized banks. The NDSL website now allows you to pay advance tax online.
Senior citizens are exempt.
Senior citizens who do not earn money from a business or profession are exempt from paying an advance tax, according to Section 207 of the Act. Rental income, pensions, interest from bank savings, and dividends, for example, are all possible sources of income for a senior citizen. As these forms of income do not fall under the income tax head of income from business or profession, senior citizens do not have to pay advance tax. Also, regardless of the amount of income a senior citizen obtains from a source other than a company or profession, they are eligible for this exemption.
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