Tax Tips: What is Advance Tax, when is it to be paid and what is the method to pay it online? Know everything here..
You must have heard about Advance Tax. Advance tax is just like a normal tax. The only difference is that instead of depositing it once at the end of the year, it has to be deposited in 4 installments from time to time. According to Section 208 of the Income Tax Act, people whose income tax liability is Rs 10,000 or more in a financial year, need to pay advance tax. Let us tell you important things related to advance tax.
When to pay advance tax in a year
The advance tax has to be paid in 4 installments i.e. every quarter. This tax applies to all types of taxpayers, salaried, freelancers, businessmen, and people earning money in any other way. The due date of its payment is decided by the Income Tax Department. Usually it is paid on 15 June, 15 September, 15 December and 15 March. The dates for paying it are-
How is advance tax calculated?
Even though the advance tax is paid in installments, it is calculated for the whole year. In this, it has to be calculated how much tax can be levied on you in a year. You can calculate the tax on the remaining income according to your tax slab by removing deductions from your income. After this, you have to pay the total tax in this way-
15 June - 15 percent of the total tax liability
15 September - 45 percent of the total tax liability
15 December - 75 percent of the total tax liability
15 March - 100 percent of the total tax liability
How to pay taxes?
Advance tax can be paid both offline and online. To pay offline, you have to go to the bank branch and deposit the income tax through challan. On the other hand, you can pay the online tax through the website of the Income Tax Department. This is the way to pay taxes online.
Go to the official website of Income Tax, incometax.gov.in.
Select 'e-Pay Tax'.
Enter your PAN number and password.
Click on Advance Tax and choose your payment method.
Complete the payment and click on Pay Now.
After the payment is done, you will get an information message and receipt.
Follow our Whatsapp Channel for latest update