Advance Tax

Advance Tax: Are you searching for Advance Tax, then you have reached the correct place. Here, we will provide you complete details about Advance Tax.

What is Advance Tax?

Advance Tax

Advance Tax is basically the tax payable on total income of the year earned from a various number of sources such as profession, salary, business, etc. One has to pay this tax before the end of the financial year.

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If the Income Tax Liability of a person is more than Rs 10,000 in a particular financial year, then he/she is fully responsible to pay tax in the same year instead of paying in the next year. Advance tax is also known as “Pay as you earn” Scheme.

Who should pay Advance Tax?

All the salaried Individuals doesn’t need to pay Advance Tax. This Tax is only relevant to the individuals who earn money other than Salary. However, all the Individuals who are earning money from the sources other than money, then they have to pay Advance Tax.

Income generated from any of the below sources have to pay Advance Tax
– Income which is earned from capital gains via shares
– Winnings earned from the lottery
– Rent or any kind of Income gained from the house property
– Interest which is earned from fixed deposits


How to Pay Advance Tax?

You can pay Advance Tax via challans at bank branches which are being authorized by the IT Dept. You can deposit Tax in ICICI Bank, RBI, HDFC Bank, Syndicate Bank or from any other authorized bank.

Moreover, you can also pay tax from Official website of IT Dept or from National Securities Depository.


How to Calculate Advance Tax?

You can calculate Advance Tax on your own and find out whether you have to pay advance tax or not.

Follow the simple steps to calculate the Advance Tax:

  • Determine your Income: First of all, you have to determine the income that you have earned from the sources other than salary. Also, keep in mind that you have to include running agreements that you need to pay later.
  • Deduct the Expenses: Deduct all the Expenses from the income. Here, you can deduct all the expenses linked with work such as rent of workplace, internet expense, travel expense, the internet and the phone calls.
  • Total Income: Here, you have to add all the income that you have received via rent of any place, interest, etc. Now, deduct the TDS from the Income.
  • Total Advance Tax: If your Tax liability is still more than Rs 10,000, then you need to pay this tax.



How to pay Advance Tax Online?

One can pay

Tax only from the Online Portal of Income Tax Department. To pay the tax, follow the simple steps given below:

  • First of all, visit the official website of Income Tax.
  • Then Login with your credentials.
  • Now, you have to select proper challan which is applicable to you.
  • Then, you have to fill all the required details in the form such as right assessment year, address, phone number, email address, etc.
  • After this, you will be redirected to the Net Banking page. Now, pay the tax using Credit/ Debit Card or Net Banking.
  • Now, you will get full details about the payment along with the challan number.
  • Then, you have to report your payment as soon as you made the payment. You can do this by adding an extra entry simply under the paid tax page.


Late Payments of Advance Tax

If any of the Individual failed to pay tax on time, then he/she has to pay an interest. Here, interest is calculated as 1% interest on the total amount on each month until the tax is fully paid. The same penalty will be considered if you are unable to pay tax by 2nd or 3rd deadline.

Advance Tax Benefits

– If you pay tax in Advance, you will be relieved from tension. Also, by paying tax in Advance, you don’t need to worry about any last minute rush.
– The speed of tax collection process gets increased.
– Government Funds gets increased and by this Government will be able to earn more interest.
– All the Businesses will able to control all the finances and will be able to make an analysis of total income earned in the year.


Advance Tax Exception

All the Senior citizens who don’t own any business don’t have to pay this tax. However, all the taxpayers who have opted any of the presumptive schemes don’t have to pay this tax. These schemes are only applicable only to the individuals whose overall business turnover is more than Rs 2 Crore in a financial year. From the year 2016-17, the scheme was also applicable for doctors, lawyers, and all the architects, if their annual receipt total is more than 50 lakh rupees.


Refund of Advance Tax

At the end of a year, if the IT-Dept find that you have paid more than what you should pay, they will refund all the extra amount. Any of the taxpayers can claim the refund by filing the form 30 of IT-Department. To apply for a refund, they have to claim from within a span of 1 year from the last year.

Advance Tax Schedule:

Advance Tax for AY 2017-18:

List of Advance Tax Schedule for all the Individuals as well as Corporate Businessman

Payment Due Date Amount Payable
On or before 15th June 2016 15% of Advance Tax
On or before 15th September 2016 45% of Advance Tax
On or before 15th December 2016 75% of Advance Tax
On or before 15th March 2017 100% of Advance Tax


For all the Taxpayers who have opted for Presumptive Taxation Scheme:

Due Date Advance Tax Payable
by 31st March 100% Advance Tax


We hope that you got all the essential information about Advance Tax. If you liked this article, then please share it with your family and friends.


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