Advance Tax Update: Advance tax is paid in four installments in a year, which does not put any additional burden on the taxpayer and the flow of government revenue also remains intact.
Advance Tax News: The tax deposited with the Income Tax Department before the end of the financial year is called advance tax. That is, it is the tax which is paid on time. Or in other words, paying tax in the same year in which you are earning is called advance tax. Under this, instead of paying a lump sum amount at the end of the financial year, you can pay tax in installments throughout the year. This does not put any burden on the taxpayers and there is a flow in the government’s revenue as well.
They have to pay advance tax
According to Section 208 of the Income Tax Act, 1961, those whose tax liability is estimated to be Rs 10,000 or more in a year have to pay advance tax. This applies to both an individual and a business. However, people aged 60 years or above who have no source of income are exempted from paying advance tax.
Advance tax is paid in four installments in a year
- First installment (15 June): 15 percent of total tax liability
- Second installment (15 September): 45 percent of total tax liability
- Third installment (15 December): 75 percent of total tax liability
- Fourth installment (15 March): 100 percent of total tax liability
How to pay advance tax
- First of all go to the official website of Income Tax
- Now go to the Quick Links tab and choose the ‘e-pay’ option
- After this, enter your PAN card number and mobile number and click on ‘Continue’
- Now an OTP will be sent to your registered mobile number, enter it and click on ‘Proceed’
- Now select the Income Tax option and fill all your details, such as assessment year, contact details, bank details
- Now the system will redirect you to the payment gateway
- Then fill in your payment details and complete the transaction
- Finally you will get a confirmation with a challan number
Calculation of advance tax
First of all, add your estimated income in a year and then on that basis, deduct the tax amount and exemptions, after this, the amount that comes out will have to be paid by you as advance tax. That is (Estimated total income – Deductions – Exemptions = Taxable income). In this, the tax is decided according to the taxpayer’s income tax slab or corporate tax rate.
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