As the name suggest any payment of tax made during the financial year for that financial year itself is known as advance tax. Therefore if you are paying any tax for FY 2021-2022 i.e. for financial year ending 31.03.2022, between 01.04.2021 to 31.3.2022 it will be termed as advance tax for F.Y. 2021-22 and any tax after 01.04.2022 will be self assessment tax for F.Y. 2021-2022. If you wish to pay advance tax during the financial year you need to go on this website: https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp.
Below are to Steps to pay Advance tax or any kind of Income tax in India:
- Once you visit the website Click on proceed button below challan 280,
- Then select 0020 if you are paying tax for a company or
- 0021 if you are paying for any other person other than company,
- Then select minor head 100 and
- Enter your PAN, Assessment year and
- Other relevant details, make the payment and save challan for future reference.
Now let’s understand who are liable to pay advance tax:
Each and every person whose tax liability during the year is above ₹ 10,000 (as per Section 208 of Income Tax Act) needs to pay advance tax. This tax liability needs to be checked after taking the credit of TDS/TCS credit available during the year (as per clause d of sub-section 1 of section 209 of the Income Tax act).
The provisions of Advance tax won’t apply to a resident aged 60 years or above if he/ she does not have any income under the head Income from Business and profession.
Thus, if you are not a senior citizen and just have income from stock market or other sources and if the total tax exceeds Rs. 10,000 then you are liable to pay advance tax.
What are the benefits of paying the advance tax?
As we all know we are always short of money therefore if we form a habit to pay advance tax in time we don’t have to worry about how would we pay such a big amount in once after March, as we have already paid it in small installments during the year.
Second benefit of paying advance tax is it will save a minimum of 5% of interest if you pay advance tax as compared to if you pay the tax in April month of the next Financial year and if you pay tax while filing Income tax return, advance tax could save your 8-9% interest which is a huge amount if you have earned any capital gain income or something like that.
Below mentioned are the due dates for paying advance tax. Do keep your calculation ready and pay proper advance tax:
||By 15th June
||By 15th September
||By 15th December
||By 15th March
|All types of taxpayers (other than those who opted for presumptive taxation scheme)
||Upto 15% of advance tax
||Upto 45% of advance tax
||Upto 75% of advance tax
|| Upto 100% of advance tax
| Taxpayers who opted for presumptive taxation scheme
||Upto 100% of advance tax
Now many people would ask how can I pay advance tax during the year as I am not aware of my income and my Chartered Accountant calculates it after the year ends so don’t worry we are here to help you can book consultation with our experts who can help you in calculating your advance tax.
Also, it is okay if you cannot your exact income for advance tax because even if you estimate anything near to your actual income you are saving a lot of interest for yourself.
We have also talked about various interest such as Interest u/s 234B or 234C which are applicable when one does not pay advance tax. To read the same CLICK HERE.
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