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Advance tax dilemma

(Guest)

Let's say a person name Vijay started as a freelancer with no other job. He got his 1st job in August and completed that in 2 weeks with good payment let say 12 lakh. He spended very little about 20000 in completing his job. And no other expenses. And he don't know if he going to get any job in future or not but in just one job he got paid good money. So my question is Does he have to pay advance tax? If yes then how? As 1st due date was 15 June. Please answer my query. Thanks

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7 Replies

Saifullah Khalid (Autodidact/Curious ) (638 Points)
Replied 04 August 2018

Originally posted by : Alok singh
	Let's say a person name Vijay started as a freelancer with no other job. He got his 1st job in August and completed that in 2 weeks with good payment let say 12 lakh. He spended very little about 20000 in completing his job. And no other expenses. And he don't know if he going to get any job in future or not but in just one job he got paid good money. So my question is Does he have to pay advance tax? If yes then how? As 1st due date was 15 June. Please answer my query. Thanks

Nature of profession/job done ? your field of expertise ?

prasad Nilugal (3924 Points)
Replied 04 August 2018

As per section 208 of the income tax act 1961 ,If your tax liability is ten thousand or more in the current year ,you have to pay advance tax ,so as per income you have to calculate estimated tax ,if it is more than 10000/- you have to pay advance tax

Saifullah Khalid (Autodidact/Curious ) (638 Points)
Replied 04 August 2018

Originally posted by : Alok singh
	Let's say a person name Vijay started as a freelancer with no other job. He got his 1st job in August and completed that in 2 weeks with good payment let say 12 lakh. He spended very little about 20000 in completing his job. And no other expenses. And he don't know if he going to get any job in future or not but in just one job he got paid good money. So my question is Does he have to pay advance tax? If yes then how? As 1st due date was 15 June. Please answer my query. Thanks

Nature of profession/job done ? your field of expertise ? nature of the entity for which the job was done (whether individual/small bussiness/Pvt limited firm ) ?

Miss Mansi Bhojani (Practicing Chartered Accountant) (1736 Points)
Replied 04 August 2018

Advance Tax Liability is applicable on all tax payers, whether salaried, freelancers or businesses. In case of salaried tax payers, if the employer TDS, then there is no further need of payment of advance tax.

However, if such an assessee has any other income other than salary, then he/she is required to meet advance tax liability for such income. Such incomes may include capital gains on shares or house property, interest on investments, etc. after making appropriate deductions for losses, if any.

How to Calculate Advance Tax?

Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. Income received in the previous financial year can be taken as the taxable income for the calculation of advance tax liability. In case of businesses and professionals like doctors, lawyers, etc. resident in India, whose gross receipts or turnover of businesses is less than ₹ 2 crore per annum, they are exempted from the mandatory payment of advance tax. They have to pay 100% Advance Tax by 15th March. Such businesses are relieved from maintaining books of accounts. However, they are not allowed to deduct any business income against this business income.
If a taxpayer fails to pay the tax or makes a short payment of it, then he/she is liable to pay a penalty of 1% p.m. on the defaulted amount for the following months till the complete tax payment is done

You can refer this.

prasad Nilugal (3924 Points)
Replied 04 August 2018

Advance tax is not applicable to individual dose not have any income under head " profit and gains of Business or profession .

(Guest)

Saifullah Khalid (Autodidact/Curious ) (638 Points)
Replied 04 August 2018

Originally posted by : Miss Mansi Bhojani
	Advance Tax Liability is applicable on all tax payers, whether salaried, freelancers or businesses. In case of salaried tax payers, if the employer TDS, then there is no further need of payment of advance tax. However, if such an assessee has any other income other than salary, then he/she is required to meet advance tax liability for such income. Such incomes may include capital gains on shares or house property, interest on investments, etc. after making appropriate deductions for losses, if any.How to Calculate Advance Tax?Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. Income received in the previous financial year can be taken as the taxable income for the calculation of advance tax liability. In case of businesses and professionals like doctors, lawyers, etc. resident in India, whose gross receipts or turnover of businesses is less than ₹ 2 crore per annum, they are exempted from the mandatory payment of advance tax. They have to pay 100% Advance Tax by 15th March. Such businesses are relieved from maintaining books of accounts. However, they are not allowed to deduct any business income against this business income. If a taxpayer fails to pay the tax or makes a short payment of it, then he/she is liable to pay a penalty of 1% p.m. on the defaulted amount for the following months till the complete tax payment is doneYou can refer this.

In my first reply/query above I asked the OP (original poster) few details regarding >> "Nature of profession/job done ? your field of expertise ? nature of the entity for which the job was done (whether individual/small bussiness/Pvt limited firm ) ? "

Without knowing about these specifics nothing can be suggested..what if the OP is eligible for 44ADA and would like to offer his earnings under 44ADA then the whole scenario will change..Advance tax will not be a big issue then ...