When to Pay Advance Tax, Eligibility & Benefits

ADVANCE TAX

Advance tax is also the income tax. It is paid if the tax liability is more than Rs.10000 in a financial year. As March 31st is the deadline of the financial year any taxes paid before or on a date are considered as advance tax. It is also called as pay as you earn tax. Advance tax is paid in advance rather than paying a lump sum amount. It is also is paid on the basis of estimated annual income. The tax can be paid partially or totally at once.

This not only helps the government but also for oneself as it may not let you feel burden during the end of the financial year as well as making the whole tax payment at one time.

Eligibility to Pay Advance Tax –

  • The ones who are salaried, having businesses, freelancers whose total tax liability is Rs.10000 or more than it in a financial year are subjected to pay advance tax.
  • Senior citizens, who are aging 60 years or above are exempt from paying advance tax.

Advance Tax in Income for Professionals-

Professionals such as pharmacists, doctors, designers, etc. come under section 44ADA. They can pay their entire amount on the 31st of March or they are exempted to pay their tax liability in one installment on or before the 15th of March of the respective financial year.

Advance Tax in Income for Businesses –

The people who are engaged in business are supposed to pay their tax on or before 15th March of the respective financial year. They are excused to pay their lump sum amount of taxes on or before the 31st March of the particular financial year.

Due Dates for Paying Advance Tax

Percentage Of Advance Tax Payable Due Date
100% of advance tax On or before 15th March
75% of advance tax On or before 15th  December
45% of advance tax On or before 15th September
15% of advance tax On or before 15th June

Advance Tax Payment

One is supposed to pay advance tax by using challan 280 likely as other regular tax payments. Many branches of the bank are been authorized by the income tax department to get the Income Tax Payment with on behalf of the government.

TWO WAYS FOR THE PAYMENT OF INCOME TAX –

  • One can visit the branch of the bank and can make a direct payment.
  • Otherwise, one can visit the official website of the income tax department and he can transact the amount using e-payment.

Process Of Advance Tax Online Payment

A candidate can pay his online payment using the steps described below:

  • Firstly, visit the official website of the income tax department to know more about the e-payment facility

advance tax payment

  • An individual (ITNS280) is supposed to choose the right form for the payment of advance tax.
  • Advance tax codes are visible (the applicable code number is 100).
  • Fill the details asked it in (name, email, PAN, address, etc.).
  • Click on proceed, you will entering into the net banking page.
  • Click on payment.
  • Once you make the payment, you will receive the receipt of the Challan280 on the next page.
  • Save this copy as it is required during the filing of ITR.
  • If the extra amount is paid during the advance tax payment, your extra amount can be refundable by submitting the Form30.

Benefits of Advance Tax Online Payment 

  • Online payments are made in less time.
  • It can be made from anywhere around the world.
  • It can be made at any time.
  • Online payments make direct payments to the government department directly.
  • This payment doesn’t require a special time to be taken out.

THINGS NEEDED TO BE TAKEN CARE DURING ONLINE PAYMENT

  • Make sure that you have a proper internet connection.
  • Check whether your details are properly filled.
  • Make sure that the amount is successfully transacted.
  • If there is any issue during the transaction, know about their refunding facilities.
  • See whether you visit the official websites of the bank for the successful transactions.
  • Look whether the taxes are discharged in your favor in order to get credits.
  • Make sure that your mobile number is updated that you can receive an SMS of the amount deducted from your account.

Helpline For Advance tax online Payments 

INCASE OF ANY ISSUES DURING ONLINE TRANSACTION, THE PERSON MUST CONTACT WITH THE BANK AUTHORITIES OR ‘TIN’ CALL CENTRES.

How to Overcome the Wrong Assessment?

  • Despite being sure while paying your tax online, you may end up with some issues like the selection of the wrong assessment year unknowingly.
  • The main cause of this is due to less knowledge of the ‘word assessment’.
  • Basically assessment means the year in which your taxes are analyzed.

Use the following steps in case you have chosen the wrong year of assessment

Step1: Even if you have chosen the wrong assessment year, file your IT returns and payment details correctly.

Step2: You can correct your challan within 7 days of the deposit date. Otherwise, you can visit the e-filing website of the income tax department for more information. Even you can assess the officer to correct the assessment year in the challan.

Step3: Your payment details do not match with the record if assessing officer processes your return and you will get a notice upon it.

Step4: Let the AO know the details of the error caused while paying the tax.

Step5: You must also submit a rectification of return under section154.

Step6: The AO has the right to make the corrections required only if he is satisfied with your rectification request.

At last, if he approved your rectification request he makes the required changes in the IT returns and corrects it.

DECLARATION OF THE TAXES PAYMENT – 

  • Once you are done with the tax payment, you must fill the information in your income tax returns.
  • Firstly, after paying your tax visit the ‘taxes paid summary page’   to update your information.
  • Now click on select on ‘Self tax payment’ option.
  • Then enter your ‘BSR Code’ and challan serial number from challan280.
  • The 7 digit number is known as BSR Code.

The 5 digit number is known as challan serial number

PENALTY FOR LATE PAYMENTS in advance tax

Under section 234B of the IT Act, if the member is unable to pay at least 90% of the tax by the end of the financial year than they will have to pay 1% of interest rate on the tax dues.