ADVANCE TAX

 Hello Friends,

My this blog is related to tell you about Advance Tax. 

Advance tax refers to paying a part of your taxes before the end of the financial year. 



Important Points to Remember:
  • Advance Tax is also called ‘pay-as-you-earn’ scheme. 
  • It is the income tax payable if your tax liability is more than      Rs 10,000 in a financial year. It should be paid in the year in which the income is received. 
  • 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. 
  • This way, if your advance tax liability for the financial year 2020-21 has exceeded Rs 10,000, you are expected to pay it in the same financial year.
  • Any amount paid up to March 31 will also be accepted as advance tax for that financial year.
  • Individuals may pay advance tax using tax payment challans at bank branches authorised by the Income Tax (I-T) Department.
  • While employers deduct TDS on salaries, advance tax is paid on income that is not subject to TDS. 
  • Professionals (self-employed) and businessmen will have to pay taxes in advance as per their business income.
  • If you miss the deadline then you have to pay the 1% simple interest as a penalty for the pending months.

Due Date of Installments with Calculation:

Example: 

Ms. Priya has Total Tax Liability in a Financial Year is of Rs. 30000. How to calculate Advance Tax as per Installment? 

Payment of advance tax: 

Total Advance Tax Liability :  Rs. 30000



I hope it will be helpful to you.

Thanks and Regards

Kulvinder Kaur
B.Com(H), MBA (Finance)

9871580806,8826566751
rightsteptoinvest@gmail.com

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