Advance Income Tax Payment

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This discussion clarifies Advance Income Tax (AIT) payments for a proprietorship business. It confirms that AIT is paid from profits earned and that the advance tax amounts themselves are not further taxable. The conversation also covers the payment schedule for AIT, noting that while payment can be made up to March 31st, paying after March 15th incurs a 1% per month interest charge on the outstanding amount.

Rahul Singh

Rahul Singh (Querist)
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27 January 2021 Hi, maybe this query is too basic but I am not sure how things work. Apologies in advance!

Basically my services business (proprietorship) has turnover of around 1 crore, and I pay Advance Tax. So want to know the money I pay Advance Tax from, is that also taxable? or any money that is contributed to tax is not calculated that way?

Thanks you.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 January 2021 Advance tax is paid out of profit earned. Tax is paid on profit earned.

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Rahul Singh

Rahul Singh (Querist)
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27 January 2021 Thanks Sir for reply. So basically if I make total profit of 1 crore in current financial year (2020-2021) then from that 1 crore I have to pay advance tax as below right?

Q1 15% (rs 410625)
Q2 45% (rs 821250)
Q3 75% (rs 821250)
Q4 100% (rs 684375)

Again to confirm, above Advance Tax Payments are tax free amounts.

Am I doing everything correct?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 January 2021 Yes, it's confirmed. You are doing it right.

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Rahul Singh

Rahul Singh (Querist)
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11 March 2021 sir, in last advance tax quarter can we pay till 31st march or it has to be till 15th march?

will there be any penalty or interest if paid till 31st march?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 March 2021 You can pay till 31st March but interest only payable.

Rahul Singh

Rahul Singh (Querist)
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11 March 2021 sir I have my services business (proprietorship) in that if I pay advance tax till 31st march and not 15th march, I have to pay interest?

if yes, how much?

Rahul Singh

Rahul Singh (Querist)
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12 March 2021 sir got chance to check this?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 March 2021 Can advance tax be paid after 31st March?
In case you are unable to pay advance tax on time, or there are any shortfalls in the advance tax paid by you, you can still pay advance tax latest by the 31st March of the same financial year. ... So, in case you pay your advance tax on 16th of September, you will still be charged with an interest of 1 percent per month.

Rahul Singh

Rahul Singh (Querist)
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12 March 2021 Thanks sir. so you mean if I pay tax on 16th or 31st march 2021, then I will be charged direct 1% interest on whole amount?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 March 2021 1% interest on amount paid after 15th March.

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Rahul Singh

Rahul Singh (Querist)
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12 March 2021 thank you so much sir for all your help, you have been great support for this community.

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