What is Advance tax?
“A stitch in time saves nine” a well proven proverb teaches us to perform all the important things in advance to avoid losses in future. Same doctrine applies for taxes as well. If you pay your Income-tax in advance i.e. before end of Financial Year, you are not required to pay any additional interest thereon. The tax you pay in advance is known as “Advance-tax”.
Why Advance tax is payable?
Advance-tax is applicable to all taxpayers including the salaried class. If the total tax liability for a Financial Year after considering TDS and tax relief is more than Rs. 10,000/-, then it is mandatory to pay Advance-tax by a taxpayer.
Generally Advance tax is payable in the following cases-
- Change in job, where salary from previous employer was not disclosed to new employer,
- Interest on Fixed deposits with banks,
- Capital gain transactions like sale of share, securities, property or other capital assets.
When to pay?
Advance-tax can be paid in following three installments for F.Y. 2015-16:-
(in case of Non-corporate taxpayers)
|Due date for payment||Amount of advance-tax to be paid|
|On or before 15th September||30% of tax liability|
|On or before 15th December||60% of tax liability less earlier paid installment|
|On or before 15th March||100% of tax liability less earlier paid installments|
- Tax liability is calculated as per the slab rates on Estimated annual income minus TDS and relief, if any.
- A taxpayer is required to pay 100% of his tax liability before 15th March to avoid payment of interest at 1% of tax liability.
What if I don’t pay?
1% Interest per month is payable for non payment/short payment of Advance-tax u/s 234C of Income-tax Act.
Who are exempted from paying Advance-tax?
Exemption for payment of Advance-tax is applicable to the following:
- Senior Citizen who does not have any Income from Business.
- Presumptive Business Income u/s 44AD.
- Others having Tax Liability less than Rs 10,000/- after considering TDS and Tax Relief on Income.
You can pay Advance tax online also. Here is step wise guidance-
- Go to website:- https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
- Click on Form 280.
- Enter your PAN and other personal details.
- Enter type of payment as (100)- Advance tax.
- Select your bank and proceed.
- Enter details of amount of advance tax.
- Provide your bank details and make payment.
Or you can visit a nearby Nationalized Bank and make the payment.
How do I show Advance tax details in my Income-tax return?
You are required to give challan details to your employer before the end of the Financial Year, so that he will consider it in your Form-16 and deduct TDS accordingly. If you miss it, you can further declare it while filing your Income-tax return in Advance Tax section under Tax Paid option.
How can myITreturn.com help?
myITreturn.com provides you a unique advance tax estimator with the help of this you can calculate your exact advance tax liability and pay it within due date. While filing your Income-tax return from here, you can declare all Advance-taxes paid in concerned section and calculate your taxes accurately.
For any support, please feel free to mail us on: myITreturn@skorydov.com