What is Advance TaxSPONSORED LINKS
This is the payment of a person’s liability tax before an economical year comes to an end. This happens on 31st of March each year. All income generation sources are susceptible to the payment of advance tax. Individuals, associations, partnership firms, trusts, corporate and HFUs are all accountable in the payment of the tax, only when their earned income surpasses the non taxable parameters. When the earned tax is below Rs.10, 000, the individual or the organization is not liable to pay tax. Senior citizens are not required to make advance tax payment when they have no income that is chargeable. The tax has to be paid after every three months throughout the entire year. That is on June, September, December and March. Either before or on the 15th of those listed months.SPONSORED LINKS
According to the tax income act, an individual or an organization has to pay the advance tax by including theupcoming future earned income into consideration within the particular financial year. This enables people to make payments on the taxes in instalments well spread throughout the year and therefore the payment of huge tax amounts at once during the end of the financial year can easily be avoided
There are two methods with certain procedures to be followed during the tax payment. Below they are listed and explained.SPONSORED LINKS
Direct payment mode
One can decide to pay tax through the filling of tax imbursement challan, ITNS 280. It can be done from designated bank branches that have the tax income department.
Online payment mode
The tax can be paid using online means. This is through TIN NSDL website. You are required to click onto: https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jspSPONSORED LINKS
Then carefully follow the steps outlined below;
- Choose challan number ITNS 280. This is payment of the income tax and also corporation tax.
- Afterwards select applicable tax as 0021 that is income tax other than for establishments
- Choose year of assessment for example FY 2015-16, AY 2016-17
- Afterwards you are required to select the mode of paying as advance tax and give out the required details.
- Online mode of payment is strictly allowed through net banking and not by debit card.
In case a person defaults on the payment of tax, which is considered to being a criminal offense. They are required to wage interest and also penalties. This is according to the established Act of income tax, 1961. Once you have waged the tax, this will later reflect on your form within 2 to 3 days after making the necessary payment.
The calculation of the advance tax is quite comparable to your tax income returns calculations. All you are required to do is to accumulate all of the sources of income, exemptions and deductions then compute your liability tax. It is important to note that it’s advisable for one to make use of a qualified tax practitioner in computing the advance tax.
After you have completed the right procedure you are to keep safe the copy of challan. They are required when you are filling your tax income returns.