Tuesday, 19 July 2011

Advance Tax–Pay Your Tax in Right Time

All Tax payers those who have a tax liability for the financial year is Rs. 10000 or more should pay advance tax. The concept is that the tax should be paid during the year at which you earn the income. The total amount of advance tax paid in a year can be deducted from the total tax liability for final payment.

Dates & Rates of Advance Tax

15th June          - 15% of total expected tax liability of Company assesses

15th September - 30% of the expected tax liability of the year of all tax payers

15th December - 30% of the expected tax liability of the year of all tax payers

15th March       - 40% of Non- Company Assesses & 25% of Company Assesses

31st March       - Tax on Capital Gain or any other casual income received after 15th March

If any of the above dates are Bank holidays the advance tax should be paid on the next working day without any interest. If the employer of a salaried tax payer did not deduct tax almost equally for all 12 months, the tax payer is liable to pay interest under section 234B or 234C.

You should calculate your total income and tax liability for the year and should pay the above mentioned rate of total tax liability. If the income increased after any of the above mentioned installments, you should recalculate the tax liability and pay accordingly in the next installment. Otherwise you have to pay interest and penalty as the case may be.

When calculating the estimated tax liability you should consider the same tax rate which is relevant for the financial year and can deposit through challan No. 280 or through electronic payment with internet banking as per the income tax rule.

Related posts

Consequences of not filing ITR in time

How to e-file Income Tax Return Yourself

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