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. This way, if your advance tax liability for the financial year 2017-18 has exceeded Rs 10,000, you are expected to pay it in the same financial year.

What do you mean by advance payment of tax examine the provisions of tax laws relating to advance payment of 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”. PERSON NOT LIABLE TO PAY ADVANCE TAX.

Do salaried person need to pay advance tax?

Salaried, freelancers and businesses– If your total tax liability is Rs 10,000 or more in a financial year you have to pay advance tax. Advance tax applies to all taxpayers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.

What are the benefits of advance tax payment?

What are the benefits of advance tax?

• It reduces the burden of paying tax at the last moment.
• It helps in mitigating stress that a taxpayer may undergo while making tax payment at the end of fiscal year.
• It saves people from failing to make their tax payments.

What are the provisions relating to advance payment of tax?

According to Section 208 of the Income Tax 1961, every individual whose estimated income tax liability for a given financial year is Rs 10,000 or more should pay his or her tax in advance, hence the term ‘advance tax ‘pay-as-you-earn’ scheme.

What are the benefits of paying taxes in advance?

Advance tax helps in reducing stress of taxpayers. By paying tax in advance, taxpayers do not have to worry about money shortage or tax payments at the last moment. It speeds up the tax collection process. It increases government funds as the government can earn an interest on the collected amount.

What are the provisions relating to advance tax?

PROVISIONS RELATING TO PAYMENT OF 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”. In this part you can gain knowledge on various provisions relating to payment of advance tax by a taxpayer.

When do I have to pay interest on my advance tax?

Interest Applicable on Late Payment of Advance Tax You are liable to pay advance tax before the end of the financial year in 4 deadlines: June 15, September 15, December 15 and March 15. If your advance tax is not paid according to schedule, then you will have to pay an interest on the late payment.

How many instalments of advance tax have to be paid?

How many instalments of advance tax are to be paid in one financial year? Advance tax has to be paid in three instalments of 30%, 40%, and 60% on 15 September, December, and March in a financial year. Does not paying advance tax in time attract a penalty? Yes, there is an interest to be paid if you don’t pay your advance tax on time.