Advance Income Tax
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The taxpayer is required to pay the Income Tax on an advance basis in 3-4 instalments depending on the type of taxpayer. We help you compute the advance tax and comply with the income tax provisions within its due date.
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Advance Payment of Income Tax
The payment of income tax is required to be made on an 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.
Due Date of Payment of Advance Tax
Naming a company is the most important requirement before one person company registration. For name approval, make sure that the proposed name of your OPC is not same or similar to existing companies / LLPs. Also make sure that it is not identical to a trademark or is showing patronage of the local/ State / Central Government.
| S. NO. | DUE DATE | ADVANCE TAX PAYABLE | PRESUMPTIVE TAX |
|---|---|---|---|
| 1. | On or before 15th June | 15% | Average Rate |
| 2. | On or before 15th Sept | 45% | - |
| 3. | On or before 15th Dec | 75% | - |
| 4. | On or before 15th March | 100% | - |
| 5. | By 31st March | - | 100% |
Key Point of Advance Tax
Step 1: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.
Step 2: 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.
Step 3: 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.
Step 4: 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.
Step 5: 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.
Step 6: Interest on Deferment of Advance 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.