How Is Advance Tax Calculated And Paid
Views: 2 | Updated On: | By Jitu Jangir
Advance tax is a system of paying taxes in instalments, rather than paying the entire amount at the end of the fiscal year. It is calculated based on the estimated income for the current fiscal year and is payable in four instalments. The due dates for these instalments are typically June 15, September 15, December 15, and March 15 of the fiscal year.
The calculation of advance tax begins with estimating the total income for the current fiscal year. This includes income from salary, business, capital gains, and other sources. The taxpayer then deducts any eligible exemptions, deductions, and credits from the total income to arrive at the taxable income. The applicable tax rate is then applied to the taxable income to determine the total tax liability for the fiscal year.
Advance tax is mandatory for individuals, Hindu Undivided Families (HUFs), firms, and companies whose tax liability for the fiscal year is expected to be more than Rs. 10,000. It is optional for those whose tax liability is less than Rs. 10,000 for the fiscal year.
Advance tax can be paid online through the income tax department's e-filing portal or by visiting a designated bank branch. A challan, or receipt, must be obtained for the payment, which serves as proof of payment. If the advance tax paid is less than 90% of the final tax liability, a penalty may be imposed.
It's important to note that if you are salaried person, the tax is usually deducted at the source, TDS, by your employer and deposited to the government, so you might not have to pay advance tax.
Stay Tuned To Sacnilk For More Income-Tax Related Information!
The calculation of advance tax begins with estimating the total income for the current fiscal year. This includes income from salary, business, capital gains, and other sources. The taxpayer then deducts any eligible exemptions, deductions, and credits from the total income to arrive at the taxable income. The applicable tax rate is then applied to the taxable income to determine the total tax liability for the fiscal year.
Advance tax is mandatory for individuals, Hindu Undivided Families (HUFs), firms, and companies whose tax liability for the fiscal year is expected to be more than Rs. 10,000. It is optional for those whose tax liability is less than Rs. 10,000 for the fiscal year.
Advance tax can be paid online through the income tax department's e-filing portal or by visiting a designated bank branch. A challan, or receipt, must be obtained for the payment, which serves as proof of payment. If the advance tax paid is less than 90% of the final tax liability, a penalty may be imposed.
It's important to note that if you are salaried person, the tax is usually deducted at the source, TDS, by your employer and deposited to the government, so you might not have to pay advance tax.
Stay Tuned To Sacnilk For More Income-Tax Related Information!
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