Advance Tax 2018 benefits for salaried employees, professionals, small business, married couples, seniors, homeowners, families
Advance Tax 2018: Filed Income Tax Return? Good. But that's not all. It's now time to clear advance tax.
Advance Tax 2018: Filed Income Tax Return? Good. But that's not all. It's now time to clear advance tax. The deadline for paying the first instalment of advance tax (June 25) is already over, the deadline for the second instalment is September 15. As per the Income Tax Department, taxpayers are liable to pay advance tax. Any assessee, including salaried employee, whose tax liability for the fiscal, as reduced by the tax deducted/collected at source is Rs 10,000 or more, needs to pay advance tax.
Advance tax amounts to paying tax as the assessee earns. Tax Deduction at source (TDS) is a form of Advance tax. However, resident senior citizens not having income from any business or profession are not liable to pay advance tax.
Penalty: Short, non-payment or deferment of payment of the advance tax, leads to a levy of interest.
All salaried employees, professionals and those running proprietary business (be it married couples, businesses, landlords or families), are required to pay advance tax. In a financial year, all assessees are required to pay advance tax in four instalments. If a person fails to pay the required percentage of advance tax in a quarter, 1% interest is charged on the due amount till the next quarter. In the end of the financial year, all additional due amount is calculated under Section 234C of the Income Tax Act. If an assessee pays less than 90% of the tax liability by the end of the financial year, s/he has to pay interest under Section 234B.
Under Section 234 B, interest is calculated at the rate of 1% per month and it is charged on the shortfall from April 1 of the assessment year till the date of payment.
How to pay advance tax
e-payment is mandatory for all corporates and also those assessees whose accounts are required to be audited under section 44AB of the Income Tax Act. e-payment ensures correct credit.
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Advance Tax Payment schedule:
On or before 15th of June 2018 - 15% of Advance Tax payable (Over)
On or before 15th of September 2018 - 45% of Advance Tax payable
On or before 15th of December 2018 - 75% of advance tax payable
On or before 15th of March 2019 - 100% of advance tax payable.