#Learn Taxation: Know about Advance Tax!

Earlier we had learned about Penalty interest u/s 234A, 234B and 234C. Know about it later.

Today we will learn all about Advance Tax.

Advance tax is tax paid before completion of financial year. It is also known as pay as you earn. It is applicable when the tax liability of any tax payer is equal to or more than Rs.10000. Income Tax Act had prescribed the manner of payment of advance tax.

Who should pay Advance Tax?

  • For salaried individuals, businesses and freelancers: Advance tax is applicable for any salaried individuals, businesses or freelance individual if their tax liability is equal to or more than Rs. 10000.
  • Presumptive businesses: For any business who had claimed its income u/s 44AD as more than 8% of its turnover less than Rs.2 crore are exempt to pay their advance tax for Financial Year 2017-18( Assessment Year 2018-19).

For Financial year 2016-17( Assessment Year 2017-18), taxpayers who opt for presumptive scheme have to pay whole amount of their advance tax in one installment on or before 15th March.

  • Presumptive income for Professionals for FY 2016-17– Starting FY 2016-17, this scheme has been extended to professionals such as doctors, lawyers, architects etc if their gross receipts are 50 lakhs or less(Section 44ADA). Such taxpayers have to pay advance tax as per quarterly installments.

Due dates for payment of Advance Tax:-
For Financial Year 2017-18 and 2016-17

  • For both individual and corporate taxpayers:-

On or before 15th June– 15% of Advance Tax

On or before 15th September– 45% of Advance Tax

On or before 15th December– 75% of Advance Tax

On or before 15th March– 100% of Advance Tax

  • For presumptive income taxpayer:-

On or before 31st March– 100% of Advance tax

  • For taxpayers opting for presumptive taxation having business income from plying, hiring or leasing of goods carriages Section 44AE:-

On or before 15th June– 15% of Advance Tax

On or before 15th September– 45% of Advance Tax

On or before 15th December– 75% of Advance Tax

On or before 15th March– 100% of Advance Tax