Online Advance Tax Payment ITRKendra

Tax Payment in Advance

The term "advance payment of tax" describes the obligation to pay income tax for money received in the same fiscal year. Taxpayers typically only need to pay for the income from the prior year. However, if the amount of tax due exceeds ten thousand rupees, it must be paid to the government prior to the deadline specified in the Act. The inclusion of Advance Tax provisions in the Act serves to secure prompt payment of taxes to the government. Every person whose projected tax burden for the financial year exceeds Rs. 10,000 is required to pay tax in advance, per Section 208 of the Income Tax Act of 1961.

Calculation of the Tax Liability for advance

1. If the amount of advance income-tax payable exceeds ten thousand rupees, every assessee is required to pay advance income-tax during any financial year in relation to the taxpayer's entire income of the financial year.
2. An assessee's advance income tax payment for the fiscal year should be calculated in the prescribed way. Prior to calculating the income tax due on the total income, the assessee must first estimate their total income. The rates in effect for the financial year should be used to compute the tax obligation. The cess for secondary and higher education should be included in the tax due. Surcharge should also be included. The assessee should be aware that whereas cess is determined as a proportion of the total of income tax and surcharge, surcharge is calculated as a percentage of income tax.
3. The amount of income tax that would be deductible or payable at source during the financial year from any income used in estimating the total income will be deducted from the income tax calculated in accordance with the previous stage. Additionally, a deduction must be made in regard to the credit amount that was obtained under Section 207 and is eligible for set-off during the fiscal year.
4. The advance income tax payable will be the remaining amount of income tax.
5. Any person other than a firm must pay the advance income tax in three installments over the course of the fiscal year, on or before the due dates.

Who is required to pay advance tax?

Since the employer often withholds tax at source, salaried individuals are not obligated to pay advance tax (TDS). However, advance tax must be paid if an employee receives any other income except salary income for which tax has not been withheld at source and the tax liability exceeds Rs.10000. On the other hand, because they often have taxable income that exceeds the advance tax payment threshold, professionals (self-employed), businesspeople, and corporations will need to pay taxes in advance.

When should you pay advance tax?

The advance tax is to be paid in the following three installments on the following dates

For Non-Corporate Assessee:

• On or before 15 September – not less than 30% of the tax payable for the year.
• On or before 15 December – not less than 60% of the tax payable for the year.
• On or before 15 December – not less than 60% of the tax payable for the year.

For Corporate Assessee:

• On or before 15 June – not less than 15% of the tax payable for the year.
• On or before 15 September – not less than 45% of the tax payable for the year.
• On or before 15 December – not less than 75% of the tax payable for the year.
• On or before 15 March – not less than 100% of the tax payable for the year.

Senior Citizens Exemption

A resident senior person (someone 60 years of age or older) who has no income from a company or profession is not required to pay advance tax, per Section 207 of the Act. For instance, an elderly individual may have a variety of income streams, including dividends, rental income, pension, and interest from bank accounts. Since these forms of income do not fall under the income tax category of income from a trade or profession, seniors are exempt from paying advance tax. Additionally, this exemption is offered regardless of how much money a senior citizen makes from sources other than their business or profession.