Advance Tax: “Due date for payment of the fourth installment of Advance Tax for the financial year 2021-22 is 15.03.2022. Make deposits on time and avoid paying interest.
Perhaps you must have received such messages from the Income Tax Department. Don’t ignore them. You should check whether there is any advance tax liability on you. If this is the case, then to avoid interest, on March 15, 2022, ie today, pay 100% tax for the financial year 2021-22.
advance tax
Advance Tax: Advance tax is deposited on the income earned in the same year before the end of the financial year. The taxpayer has to calculate his tax liability and pay tax in four installments during the financial year. Taxpayers are generally not expected to deposit tax in one installment.
Taxpayers have to deposit their estimated tax in installments of 15 per cent, 45 per cent, 75 per cent and 100 per cent respectively before June 15, September 15, December 15 and March 15.
Employees will suffer so much if EPFO reduces interest on PF, know full calculation
How to Calculate Your Income
Aarti Raute, Partner, Deloitte India said, “For computing advance tax, a taxpayer has to estimate the total income generated during the year on which he will have to pay tax.”
He said, adjusting for suitable changes in the level of income of the previous year, changes in interest rate, rent from the property, etc., the income is reflected in Form 26AS as well as for the year. Include income from investments during the period. He said that the information related to tax paid and compliance are included in Form 26AS.
Who has to deposit advance tax?
Advance tax is paid in many circumstances. If you are a freelancer, salaried and doing business and the tax liability on your annual income is more than 10 thousand, then advance tax has to be paid. Senior citizens (60 years of age or more) who do not have any income from business or profession are exempted from advance tax.
A salaried person who does not have any income from anywhere other than salary, then he does not have to pay advance tax, because the employers deduct the tax from the monthly salary and deposit it with the Income Tax Department.
If you fail to pay tax, you will be fined
Keep in mind that if you do not pay advance tax by March 15, you will have to pay a penalty of one percent. Since the next installment comes only after three months, the penalty for 3 months has to be paid along with that installment. If there is a delay of even one day from March 15, then after three months you will have to pay the penalty for all these months.
For example, if your tax liability is Rs 1 lakh and you have to pay Rs 15,000 by March 15. If you deposited Rs 15,000 as advance tax on March 16, then a three-month fine of Rs 450 (with 1 per cent) will also have to be paid. It can be seen here that due to delay of 1 day, you had to pay a fine of three months.
how to deposit tax
You can pay advance tax offline as well as online. Taxes for offline payment can be made using the payment challan (Challan No. 280) at a bank branch authorized by the Income Tax Department. For online payment, visit the Income Tax Department’s website www.incometaxindia.gov.in and click on e-pet taxes.
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