The Advance Tax Synopsis

Deadline for filing first instalment of advance tax ends 15 June. Come let us have a synopsis of what is Advance tax all about:

Paying advance tax helps you divide your tax liability over the year rather than paying at one go. Not paying advance tax can attract a penalty

You need to pay the first instalment of advance tax by 15 June.

Paying advance tax helps you divide your tax liability over the year rather than paying at one go at the end of the financial year.

Who needs to pay

At the beginning of the year, you should ideally estimate your total income for the year, especially if you are a businessman or professional. If the expected tax liability on the estimated annual income is more than Rs10,000, you have to pay advance tax.

For individuals with salary as the sole income, advance tax is taken care of by the employer who deducts tax at source at the time of crediting salary.

But even if your primary source of income is salary but you have other income which is not declared, you may have to adhere to “advance tax” rules and pay it as stipulated in the Income tax Act, 1961. Other income like rental income or interest from bank deposits or capital gains from an investment and so on will fall in the ambit of advance tax, provided the total tax liability on these exceeds Rs10,000 a year.

However, a resident senior citizen (an individual who is 60 years or above), not having income from business or profession, is exempted from paying advance tax.

When is it paid

Advance tax has to be paid in four instalments. The first is due on 15 June each year, by when the assessee has to deposit 15% of her tax liability. By 15 September, she should have paid 45%, by 15 December 75% of the income tax due for the financial year and by 15 March, 100% of it.

Assessees who have opted for presumptive taxation, the entire advance tax is payable on or before 15 March.

While paying advance tax the assessee is not required to submit any estimate or statement of income to tax authorities.

After making payment of any of the instalments of advance tax, if there is a change in the tax liability, then the taxpayer can revise the amount of advance tax in the remaining instalment(s) and pay tax as per revised estimates.

The advance tax can be paid online as well as offline by the assessee.

For any questions, feel free to reach us at info@gjmco.in


Thanks & Best regards,

Knowledge Base Team

GJM & Co.

Chartered Accountants

www.gjmco.in





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