ADVANCE TAX

What is Advance Tax Payment?

Advance Tax, also known as the “pay-as-you-earn” tax, is the income tax payable if your total tax liability exceeds ₹10,000 in a financial year. It is paid in installments during the year instead of a lump sum at the year-end. Advance Tax applies to salaried individuals, self-employed professionals, businesses, and companies.

Importance of Advance Tax Payment

• Avoid Penalties: Prevent interest under Sections 234B and 234C for non-payment or late payment.
• Timely Tax Compliance: Helps the government maintain a steady revenue stream.
• Cash Flow Management: Spreads the tax liability across the year, easing the burden at the year-end.

Who Needs to Pay Advance Tax?

• Salaried Individuals: If income from salary and other sources (e.g., rental income, interest) exceeds ₹10,000 in taxes.
• Self-Employed Professionals: Lawyers, doctors, freelancers, or consultants earning taxable income.
• Businesses: Sole proprietors, partnership firms, and companies with taxable profits.
• Senior Citizens: Exempt if they do not have income from a business or profession.

Documents Required for Advance Tax Payment

1. Salaried Individuals

• Salary slips or Form 16 to estimate tax liability.
• Details of income from other sources (e.g., rent, interest, capital gains).
• Tax-saving investment proofs (e.g., LIC, PPF, ELSS).

2. Self-Employed Professionals

• Profit and Loss Account for income estimation.
• Bank statements to track income and expenses.
• Details of any advance tax already paid in earlier quarters.

3. Businesses

• Financial statements (Profit and Loss Account, Balance Sheet).
• Estimated income and expenses for the financial year.
• TDS certificates for income already subjected to tax deduction.

4. NRIs (Non-Resident Indians)

• Details of income earned in India (e.g., rental income, capital gains).
• Taxable income details from Indian sources.
• PAN and bank account details for payment.

Advance Tax Payment Schedule

• 1st Installment (15th June): 15% of the estimated tax liability.
• 2nd Installment (15th September): 45% of the estimated tax liability.
• 3rd Installment (15th December): 75% of the estimated tax liability.
• 4th Installment (15th March): 100% of the estimated tax liability.

Steps to Pay Advance Tax

1. Estimate Taxable Income: Calculate total income from all sources.
2. Compute Tax Liability: Apply the applicable income tax slab rates and deduct TDS if applicable.
3. Pay Online/Offline:
   • Online: Visit the Income Tax Department’s portal and use challan ITNS-280.
   • Offline: Deposit the tax at an authorized bank using the same challan.
4. Track Payment: Save the challan receipt and reconcile the payment with Form 26AS.

Why Choose Us for Advance Tax Payment Assistance?

• Accurate Calculations: We ensure your taxable income is calculated precisely.
• Timely Reminders: Avoid penalties with our advance tax due date reminders.
• Hassle-Free Payments: Assistance with online or offline tax payments.
• Post-Payment Support: Help with verifying payments in Form 26AS and filing returns.