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Advance tax and TDS are the direct tax rules framed by the government in order to have regular inflow of funds to carry out regular economic activities. Advance tax implies that income tax must be paid in advance instead of lump sum payment at the end of the year. It is also called as pay as you earn tax. The advance tax payment should be made in instalments according to the due dates prescribed by the Income Tax department.
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Advance tax liability arises at the time when the taxpayers’ estimated tax liability in a financial year is beyond 10000 rupees. The advance tax must be paid in 4 instalments in a year. It means the taxpayer who is liable to pay this tax must pay 15% of the estimated tax liability on or before June 15, 45% on or before September 15, 75% on or before December 15 and 100% on or before March 15.
It may be noted that in case the taxpayer fails to pay the advance tax on the due dates under Section 234C, Interest penalty will be charged at the rate of 1% a month or a part of the month.
Here is a list of advance tax rules that a taxpayer must be aware of:
Therefore the taxpayer will need to pay advance tax even if an amount is deducted for TDS purposes, but his annual liability is more than 10000 rupees.
One can easily check the status of advance tax payment challan by visiting the following link- https://tin.tin.nsdl.com/oltas/index.html Advance tax is the direct tax rule framed by the government in order to have regular inflow of funds to perform regular economic activities.
Read our article:Is it Possible to File ITR for the Previous 3 Years Together?
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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