The whole tax legal responsibility for any taxpayer is arrived at after taking into consideration the revenue earned from numerous sources. As per part 208 of the Income Tax Act, each particular person whose estimated tax legal responsibility for the yr is Rs. 10,000 or extra, has to pay his tax prematurely, within the type of advance tax. The advance tax needs to be paid in 4 installments in the course of the monetary yr.
After making cost of first or second or third instalment of advance tax, if there’s a change within the tax legal responsibility, then the taxpayer can revise the quantum of advance tax within the remaining installments and pay the tax as per revised estimates.
However, not all taxpayers have to pay advance tax even when their tax legal responsibility is meant to be Rs 10000 or extra within the yr. A resident senior citizen (i.e., a person of the age of 60 years or above in the course of the related monetary yr) not having any revenue from enterprise or career will not be liable to pay advance tax.
A taxpayer choosing the presumptive taxation scheme of part 44AD can be liable to pay advance tax in respect of enterprise lined below part 44AD.
Due dates for cost of various installment of advance tax are:
All assessees (apart from the eligible assessee as referred to in Section 44AD or part 44ADA)
By fifteenth June: Minimum 15% of advance tax
By fifteenth September: Minimum 45% of advance tax
By fifteenth December: Minimum 75% of advance tax
By fifteenth March: Minimum 100% of advance tax
Taxpayers who opted for presumptive taxation scheme of part 44AD or part 44ADA
By fifteenth June: Nil
By fifteenth September: Nil
By fifteenth December: Nil
By fifteenth March: Minimum 100% of advance tax
Any tax paid until thirty first March will likely be handled as advance tax. If the final day for cost of any installment of advance tax is a day on which the banks are closed, then the taxpayer ought to pay the advance tax on the instantly following working day.
Taxpayers apart from an organization, who’re required to get their accounts audited, shall pay taxes via the digital cost mode utilizing the web banking facility of the authorised banks. Any different taxpayer will pay tax both by digital mode or by bodily mode i.e. by depositing the challan on the receiving financial institution
Computation of advance tax legal responsibility
Tax might be computed on the present revenue (estimated by the taxpayer) on the charges in drive in the course of the monetary yr.
From the tax so computed, tax deducted or collected at supply will likely be deducted and the stability tax payable will likely be used to compute the advance tax legal responsibility.
Also, aid of tax allowed below part 90 or part 90A or any deduction below part 91 or any tax credit score allowed to be set off as per part 115JAA or part 115JD will even be deducted whereas computing the advance tax legal responsibility
What if a taxpayer fails to pay advance tax? “You are required to pay interest on due tax under Section 234 C if there is a delay in the payment of Advance Tax,” says Deepak Jain, chief govt, TaxSupervisor.in
How To Calculate Advance Tax Liability?
According to Jain, the process of calculating Advance Tax legal responsibility might be segregated into 4 easy steps.
Step 1: Sum up the overall revenue earned from all the opposite sources apart from the wage earned.
Step 2: To this quantity add different revenue that you just earned like curiosity from FDs, home lease, and lottery winnings.
Step 3: Deduct the bills from that quantity equivalent to medical insurance coverage, premiums, telephone prices, journey bills and additional on.
Step 4: Now its instances to calculate revenue tax legal responsibility on the overall taxable revenue
Step 5: If the quantity due tax legal responsibility is greater than 10,000 after taking into consideration TDS and TCS, you’re liable to pay Advance Tax.
Source: www.financialexpress.com”