Understanding advance tax for salaried individuals

Tax queries 197 views 6 replies

NaviN

Consultant

129 Points Joined May 2016

Hi. Googling for "Advance tax" leads to a lot of complex information and I am still confused.

Hope I could ask questions one by one and receive answers that would make things clear to anyone searching.

Question 1:

I understand that I dont have to pay tax for any income for which TDS is already deducted? So if my employer deducts TDS from my salary and the bank deducts TDS from my Fixed and Recurring deposits, and if I have no other source of income or capital gains, then I assume I wont have to pay advance tax?

But if the annual savings interest from my bank accounts is Rs.10001, then I would have to pay advance tax?

Question 2:

When calculating how much advance tax to pay (on March 10th), do I calculate based on the Rs.10001 or do I calculate based on salary+FD+RD+10001?

Question 3:

Is there a penalty if I dont pay advance tax in June, Sept etc but I pay the tax before March 15?

Question 4:

Is there an ITR form for advance tax or do we directly go to the challan page and directly enter the amount?

Question 5:

Is it worth not paying the interest? If I dont pay advance tax and instead invest that money in a mutual fund, would I stand to make a little more money than the money lost in paying the penalty when filing ITR in July?

Replies (6)

Guest

Advance tax means income tax should be paid in advance instead of lump sum payment at year end. It is also known as pay as you earn tax. These payments have to be made in installments as per due dates provided by the income tax department.

If your total tax liability is Rs 10,000 or more in a financial year you have to pay advance tax. Advance tax applies to all tax payers, salaried, freelancers, and businessmen. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.

Taxpayers who opt for presumptive scheme where business income is assumed at 8% of turnover are exempt from advance tax for FY 2014-15 and FY 2015-16. However starting FY 2016-17, such taxpayers have to pay whole amount of their advance tax in one installment on or before 15th March. Presumptive scheme is covered under section 44AD and 44AE. Starting FY 2016-17 businesses with turnover of Rs 2crores or less can opt for this scheme. This scheme has been extended to professionals such as doctors, lawyers, architects etc starting FY 2016-17, if their receipts are 50lakhs or less. Read in detail about presumptive taxation here

Due Dates for payment of Advance Tax

FY 2016-17
For both individual and corporate taxpayers

Due Date	Advance Tax Payable
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

Guest

now come to your questions

Q1 - IF YOUR INCOME FROM ALL THE SOURCES MUNUS TDS IS MORE THAN 10000/-

U NEED TO PAY ADVACE TAX DUE DATES MENTION BELOW

Due Dates for payment of Advance Tax

FY 2016-17
For both individual and corporate taxpayers

Due Date	Advance Tax Payable
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

Guest

90% OF TOTAL TAX SHOULD PAY BEFORE 15 MARCH AND 100 % TAX

SHOULD PAY BEFORE 31 MARCH

CHALLAN 280 USE FOR PAYING ADVANCE TAX

HW TO PAY ADVANCE TAX USE BELOW LINK

https://cleartax.in/Guide/HowToPayIncomeTaxDue

Guest

IF ADVANCE TAX NOT PAID USE BELOW LINK

https://yourfinancebook.com/what-happens-when-advance-tax-due-date-is-missed/

NaviN

Consultant

129 Points Joined May 2016

Thank you Samir, but the objective of posting my question as Question 1 etc is so that (I would be able to understand the answer and so that) the answer would be available neatly for anyone who google's for it.

Since you have posted multiple posts and have also not answered all questions, it hasn't really helped me. Would you be kind enough to delete your answers and to post a single concise answer to all questions as a single post?