Why Do We Pay Advance Tax?

How advance tax is calculated with example?

Advance tax: An example As per the first instalment cut-off for advance tax you will have to pay 15% of Rs.

1 lakh by 15th June, 2019, which comes to Rs.

15,000.

Similarly, in your next instalment you must pay 45% of Rs..

Can advance tax be paid after 31st March?

In case you are unable to pay advance tax on time, or there are any shortfalls in the advance tax paid by you, you can still pay advance tax latest by the 31st March of the same financial year. … So, in case you pay your advance tax on 16th of September, you will still be charged with an interest of 1 percent per month.

Is TDS considered as advance tax?

Advance tax is applicable when an individual has sources of income other than his salary. … While employers apply TDS on salaries, advance tax is paid on income that is not subject to TDS.

What is the last date of advance tax payment?

Advance tax payment of Rs. 33750 (45%) will be paid before or on 15th September. Advance tax payment of Rs. 33750 (75%) will be paid before or on 15th December….Advance Tax Due Date & Amount.S.N.Due date of tax instalmentAmount of tax payable4.Either on or before 15th of March100% of tax liability.3 more rows

Is it mandatory to pay advance tax?

Taxpayers are required to make advance tax payments if their total tax liability (including income from other sources and so on) in a financial year is more than Rs 10,000. … b) When the advance tax paid by you is less than 90 per cent of the assessed tax.

Can advance tax be paid after 15 March?

You are liable to pay advance tax before the end of the financial year in 4 deadlines: June 15, September 15, December 15 and March 15. If your advance tax is not paid according to schedule, then you will have to pay an interest on the late payment. The interest payable can be rounded off to the nearest hundred.

How is advance tax paid for individuals?

How to Pay Advance Tax Online?Visit the e-payment facility on the website of Income Tax Department.Choose the right form for the payment of Advance Tax. … Select the correct code for Advance Tax. … Fill out your PAN, name, address, email address, number etc.More items…•

Who is exempt from paying 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.

What if advance tax due date is Sunday?

If on the due dates is Sunday or any holiday then the assesee can deposit the advance tax on next working day. It will treated as advance tax and no penal interest will be charged. … The penal interest at the end of the financial year will be calculated by the delay from the due date of particular installment.

What is the interest on late payment of advance tax?

2. InterestRate of InterestPeriod of InterestIf Advance Tax paid on or before December 15 is less than 75% of the Amount*Simple interest @1% per month3 monthsIf Advance Tax paid on or before March 15 is less than 100% of the Amount*Simple interest @1% per month–2 more rows•Nov 4, 2020

How do I deposit advance tax?

1. Steps to Pay Income Tax DueStep 1: Select Challan 280. Go to the tax information network of the Income Tax Department and click on ‘Proceed’ under Challan 280 option.Step 2: Enter Personal Information. For individuals paying tax: … Step 3: Double check Information. … Step 4: Check Receipt (Challan 280)

What happens if you don’t pay advance tax?

If you have to pay Rs 10,000 or more in taxes in a financial year, advance tax may be applicable to you. Advance Tax means paying your tax dues on the due dates provided by the income tax department. If you don’t pay advance tax on time or default completely, you may be liable to pay interest under section 234B.