Advance Payment of Income Tax

The payment of income tax is required to be made on estimated basis during the financial year itself. The legal provisions of payment of the advance tax are mandatory in case the tax payable is more than Rs. 10,000/- in a financial year.

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Advance Payment of Income Tax

Key Point of Advance Tax

Meaning of Advance Tax
Meaning of Advance Tax
In general scheme of taxation a taxpayer is required to pay income tax after the conclusion of the financial year, However, if the total income tax payable is more than 10,000/- in a financial year then the tax is to be paid in advance as per due date.
Who needs to pay Advance Tax
Who needs to pay Advance Tax
Every taxpayer, whether he is a salaried employee, freelancer or having business income in a proprietorship, Firm, OPC, LLP or a company is required to pay income tax on advance basis if the tax is more than 10k during the FY
Who is exempt from advance tax
Who is exempt from advance tax
an Individual, HUF or firm whose income is taxed on the presumptive basis under income tax is not required to pay tax in advance, this relaxation is ordinarily available to small business, paying tax as a % of the turnover and not on actual profits.
What is presumptive taxation
What is presumptive taxation
The taxpayer under presumptive taxation has to pay tax on 8% of the turnover. Only individual, HUF and partnership firms qualify for presumptive taxation. In case of trading, the turnover limit is two crore whereas for professionals it is 50 lacs.
Interest on late payment
Interest on late payment
The advance tax must be paid within due date; the dates are provided hereunder for easy reference. On the late payment of advance tax, the taxpayer is liable for an interest @ 1% per month or part thereof.

 

Interest on deferment of advance tax
Interest on deferment of advance tax
If the advance tax is not paid within its due date then apart from the interest for late payment, the taxpayer is also required to pay another interest @1% for deferment of tax for each month of delay or a part thereof

 

Due Date of Payment of Advance Tax

Sl. No.

table
  • 1
  • 2
  • 3.
  • 4.
  • 5.

Due Date

table
  • On or before 15th June
  • On or before 15th September
  • On or before 15th December
  • On or before 15th March
  • By 31st March

Advance Tax payable

table
  • 15% of Advance Tax
  • 45% of Advance Tax
  • 75% of Advance Tax
  • 100% of Advance Tax
  • -

In case of presumptive

table
  • -
  • -
  • -
  • -
  • 100 of Advance Tax

Sl. No

Due Date

Advance Tax payable

In case of presumptive

1

On or before 15th June

15% of Advance Tax

-

2

On or before 15th September

45% of Advance Tax

-

3

On or before 15th December

75% of Advance Tax

-

4

On or before 15th March

100% of Advance Tax

-

5

By 31st March

-

100 of Advance Tax

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