Are you a first-time advance tax-payer? If
yes then this article will help you know the term precisely. You will also learn
the tricks of advance tax calculation.
However, before dig into to the detail, we want you to be proverbial with the
term ‘Advance Tax’.
Advance Tax is a part of income tax which
is payable at the time the income is earned i.e. during the year rather paying
at the end of the financial year. Those whose income tax liability is more than
10,000 in a financial year, he/she is eligible to pay Advance Tax. The best
part of this tax is you can pay the tax on instalments. It is also famous as
‘Pay as you earn scheme’ which has to pay as per the due date mentioned by the
Income Tax Department.
Advance Tax is payable by only those who
earn income from sources other than salary. Here, if a salaried person earns
income from other sources than he has to pay this tax otherwise the salaried
group is not included as they already pay tax or the employer deducts it.
Senior Citizens without any business income are also exempted from paying the
tax. However, we have categorised some
sources, which attract advance tax:
If an income received via
Rent earned from a house
Interest that earned from FD
Winnings earned from lottery
to Pay Advance Tax:
· Pay it through tax payment
challan at bank branches listed by the Income Tax
Department such as ICICI
Bank, Reserve Bank of India, HDFC Bank, Syndicate
Bank, Allahabad Bank, State
Bank of India and so on.
· You can also pay online through
the Income Tax Department or National
Securities Depository (NSD) by following
the below steps-
Go to the government website
1- You will see the option of the challan, Select the right challan
option to pay the tax
2- Fill all the required details like address, phone number, assessment
name etc. And follow the further instructions
3- Once done with the details mention part, we will be redirected to
banking page and you are required to rechecked the income to be paid
4- Now you’ll get details of your payment you made with the challan
5- Lastly and most important is you’ll have to report your payment
made it through adding an additional entry under the paid tax
to Calculate Advance Tax:
When you are paying Advance Tax, it is your
utmost right to know how to calculate Advance Tax. Well, it’s sometimes better
not to rush to your CA and do it by your own. Again, to avoid last minute
hassle, knowing advance tax calculation
is a saviour. So, we believe these easy steps will make the process more
convenient to you. Here’s sneak peek into few steps of calculating the Advance
· Know the Income- Determine your income
other than your salary is most important. You are liable to add the ongoing
agreements that might pay out later.
· Exclude the Expenses- It is advisable to
deduct your expenses from the income. These expenses include rent of the workplace,
travel expense, internet and phone cost etc.
· Calculate Total Income- Add the
additional income that you received from the sources like house rent, interest
on FD accounts etc. Exclude the TDS deducted from your salaried account.
· Calculate the Slab- If your total tax
due exceeds 10,000, then you are eligible to pay Advance Tax.
Being a responsible citizen, you’re
liberate enough to make yourself up-to-date with any changes related to tax
that influences your income. Paying the Advance Tax, you are not only up to
your expectations and relax the stress level but also it helps in increasing
the government funds.