Know Step to Pay Advance Tax and way to Calculate Tax Liability, last date 15 December 2021
The due date for Advance Tax Payment 3rd Installment is 15 December 2021. Taxpayers need to know that as per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”. In this part you can gain knowledge on various provisions relating to payment of advance tax by a taxpayer.
Who is Liable to pay Advance Tax?
Every person whose estimated tax liability for the year is Rs. 10,000 or more is liable to pay advance tax be it Individual, Compnay, LLP, Partnership Firm, Trust who has tax liability or any other entity
Are Senior Citizen Liable to pay Advance Tax?
A resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax.
So If Senior Citizen is Non Resident and having business or professional as income, he has to compute advance tax liability and pay
Further Taxpayers who opted for presumptive taxation scheme of section 44AD or section 44ADA need not pay first three installment, but have to pay 100% of tax in last installment of 15 March
What are due dates to Pay Advance Tax ?
Advance tax is to be paid in different installments. The due dates for payment of different installments of advance tax are as follows:
| All assessees (other than the eligible assessee as referred to in Section 44AD or section 44ADA) | Minimum 15% of advance tax | Minimum 45% of advance tax | Minimum 75% of advance tax | Minimum 100% of advance tax |
| Taxpayers who opted for presumptive taxation scheme of section 44AD or section 44ADA | Nil | Nil | Nil | Minimum 100% of Advance tax |
Please Note : 1) Any tax paid till 31st March will be treated as advance tax.
Note 2)If the last day for payment of any instalment of advance tax is a day on which the banks are closed, then the taxpayer should pay the advance tax on the immediately following working day [Circular No. 676, dated 14-1-1994]
What are modes to pay Advance Tax?
A corporate taxpayer (i.e., a company) shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks. Taxpayers other than a company, who are required to get their accounts audited, shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks.
Any other taxpayer can pay tax either by electronic mode or by physical mode i.e. by depositing the challan at the receiving bank.
How to Calculate the Income for purpose of Advance Tax?
Advance tax can be paid by the taxpayer either on his own account or in pursuance of an order of the Assessing Officer. The taxpayer who is liable to pay advance tax is required to estimate his current income and pay advance tax on his own account. In such a case, he is not required to submit any estimate or statement of income to the tax authorities.
After making payment of first or second or third instalment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining instalment(s) and pay the tax as per revised estimates.
Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. Following are the steps to be followed to compute total income
(1) Compute your Gross Total Income (GTI), taking into account incomes under various heads: Salary, Business & Profession; House Property; Capital Gain; and Other Sources which are main heads of income in Income Tax
(2) From the GTI you may claim for deductions such as Section 80C, 80D, 80G, 80E, 80EE, etc., as the case may be, under chapter VI-A of the Income Tax Act, 1961. This would get you to the Net Taxable Income (GTI minus Deductions under chapter VI, including donation to political party or trust.
(3) Thereafter, apply the tax rates as per the tax slab applicable to calculate your total tax dues. And from the tax dues, do not forget to subtract the tax deducted at source (TDS) which has been already deducted. This information you can also get from 26AS Statement online
(4) The final amount you derive needs to be paid as Advance Tax, based on the percentage as mention in the above table and picture
What happens if you don’t pay Advance Tax?
Non-payment of Advance Tax will attract penal interest as per the provisions of Section 234B and Section 234C. The interest is 1% simple interest per month calculated on the amount of ‘unpaid Advance Tax’ which is Assessed Tax less the Advance Tax paid if any. However, if a person has cleared 100% of his/her dues by 15th March, then he/she would not have to pay any tax at the time of filing ITR. As the Income Tax Department would adjust the advance tax paid by you against the total tax liability. In case of difference between tax liability and tax paid, the taxpayer would have to pay the balance amount along with interest.
How to Pay Advance Tax online for FY 2021-22 and FY 2022-23?
While paying Advance Tax, you don’t have to submit an estimate or statement of income to the tax authorities. You have to fill Challan No/ITNS 280, which can be done online or through any nearest bank. The advance tax for FY 2021-22 for the third instalment is 15th dec 2021.
Following are the steps for payment of Advance tax for individual taxpayers:
Go to site https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
• Select challan no CHALLAN NO./ITNS 280
• In that form select (0021) Income Tax (Other than Companies)
• Enter your PAN number and Select Assessment year as AY 2022-23
• Enter your address and amount of tax i.e Rs. XXXX
• Select type of payment as (100) ADVANCE TAX
• Select your bank it will ake you to your bank page and you can enter your login ID and password and pay in tax column total tax to be paid i.e Rs. XXXXX
• Once paid you will be redirected to the BSR Code and challan details
• Download/ Save the Challan Copy and email the challan copy
In case Advance Tax paid by the Assessee is more than his actual Income Tax Liability, he can claim Refund of Income Tax by furnishing the details of tax deposited in the Income Tax Return.
To help taxpayers properly compute their Advance Tax liability and the interest applicable thereon, the Income Tax Dept has also prepared an online advance tax calculator which can be accessed through this link – http://www.incometaxindia.gov.in/pages/tools/advance-tax-calculator.aspx
In case you want professional help to calculate you can consult by clicking here
How to check advance tax payment status?
To check the status of your advance tax payment challan, go to https://tin.tin.nsdl.com/oltas/index.html. Select CIN (Challan Identification Number) Based View. Then enter the required details being asked for, in order to view the status. You can also check the list of advance tax payments made by logging in to your income tax account at https://www.incometaxindiaefiling.gov.in/home and going to My account -> View Form 26AS (Tax Credit), and entering the financial year and type of view/download.
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