What Is The Benefit Of Advance Tax?

Is it mandatory to pay advance tax?

Advance tax payment is mandatory for all assessee whose estimated tax liability is above ₹ 10,000.

The calculation of advance tax is made by applying the tax slab rate on the estimated income of an individual for the concerned year.

The payment of advance tax is to be done in 4 instalments..

What happens if advance tax is not paid?

As per Section 234B of the IT Act, if a taxpayer fails to pay at least 90% of the payable taxes before the financial year ends, he/she will have to pay penalty interest at the rate of 1% on the tax dues.

Who are exempted from paying advance tax?

If the total tax liability of any taxpayer is more than Rs 10,000 in a financial year then he is liable to pay advance tax during the year. 3. Advance tax applies to all tax payers, salaried, freelancers and businessmen. Senior citizens not having any business income are exempt from payment of 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.

Why do I have to pay self assessment tax in advance?

‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed). you’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings. …

Can advance tax be paid online?

You can visit any of the bank branches and make the required payment. Alternatively, you can make online payment by visiting the official website of the income tax department. Visit the e-payment facility on the website of Income Tax Department. Choose the right form for the payment of Advance Tax.

Can advance tax be paid after 15 March?

If you miss the deadline of 15th March Well, all is not lost in case you fail to pay advance tax by the end of a financial year, you can still discharge the tax liabilities after the end of the financial year. However, the tax paid after the due date is treated as self-assessment tax and not as an advance tax.

Who is liable for advance tax?

Liability to pay advance tax As per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”.

Can a salaried person pay advance tax?

Advance Tax is applicable to any assessee, including salaried employees, whose tax liability for the financial year as reduced by the tax deducted / collected at source is Rs 10,000 or more. Salaried people have to be careful about the money they have put in a savings bank account.

Why do we pay advance tax?

Also called ‘pay-as-you-earn’ scheme, advance tax is the income tax payable if your tax liability is more than Rs 10,000 in a financial year. … By paying in advance, you help the government and also yourself by not finding it hard to pay the whole tax at one go at the end.

What is the last date to pay advance tax?

When to Pay Advance Tax for FY 2020-21? First Instalment- by 15th June every year you have to pay 15% of tax liability. Second Instalment- by 15th September you have to pay 45% of tax liability. Third Instalment- by 15th December you have to pay 75% of tax liability.

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.

Is senior citizen exempt from advance tax?

Those who have total tax liability of over 10,000 on an estimated total income in a financial year (FY) need to pay advance tax.

Is Advance tax date extended for FY 2020 21?

Check why you should pay advance tax before June 30. Income Tax Payment Due Date 2020: In one of her recent press conferences, Finance Minister Nirmala Sitharaman announced that the due date for Income Tax Return filing for AY 2020-21 has been extended to 30th November 2020 from July/October 2020.