Advance Tax

Advance Tax-What is advance tax? Who is liable to pay Advance Tax? Due Date of Advance Tax. How to calculate Advance Tax?

What is Advance Tax?

Advance tax means Income Tax should be paid in advance instead of lump sum payment at year end. It is also known as pay as you earn tax. These payments have to be made in instalments as per due dates provided by the income tax department.

DUE DATE OF ADVANCE TAX PAYMENT

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Who should pay Advance Tax?

Salaried, freelancers and businesses– If your total tax liability is Rs 10,000 or more in a financial year you have to pay advance tax. Advance tax applies to all taxpayers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.

Presumptive income for Businesses–The taxpayers who have opted for presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15 March. They also have an option to pay all of their tax dues by 31 March.

Presumptive income for Professionals– Independent professionals such as doctors, lawyers, architects etc. come under the presumptive scheme under section 44ADA. They have to pay the whole of their advance tax liability in one instalment on or before 15 March. They can also pay the entire amount by 31 March.

Is an NRI liable for payment of advance tax?

An NRI, who has an income accruing in India in excess of Rs 10,000, is liable for payment of advance tax.

Will I be penalized if I do not pay advance tax?

Non payment of advance tax will result in levy of interest under 234B and 234C of the Income tax Act, 1961.

How to pay advance tax? Connect with our experts on 7618131212 for best advice.

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