Advance Tax Payment Deadline, Last Day to File Advance Income Tax Today: Are you however to spend the 4th and final instalment of your advance tax to the Income Tax Department? If yes, then hurry up as you need to have to spend the final instalment of this monetary year’s advance tax most recent by March 15, 2021, or be ready to face penalty.
The Income Tax Department has also stated, “Your Advance Tax plays a pivotal role in shaping the development story of the nation. Let us, together, accelerate the nation building process. Do remember to pay the fourth instalment of your Advance Tax on or before 15th March, 2021.”
It could be noted that non/quick payment of advance tax is liable to penal interest. Therefore, if you do not want to spend any penal interest or face any penalty as per the Income Tax Act, then you should spend the remaining advance tax today.
What is Advance Tax?
In addition to Tax Deducted at Source (TDS), advance tax is a mechanism via which the government collects earnings tax income from the concerned taxpayers on a standard (quarterly) basis. This mechanism is utilized specifically in case of these incomes which are not topic to TDS or exactly where the price of Tax Deducted at Source is much less than the price at which one’s earnings is taxed.
Who requires to spend Advance Tax?
Apart from organizations, even people – which includes salaried workers – whose tax liability is Rs 10,000 or more even just after deducting TDS/TCS are liable to spend advance tax.
How is Advance Tax Calculated & Paid?
Advance Tax is calculated on the basis of a taxpayer’s anticipated tax liability of the year, and is paid in instalments as described under:
(a) In case of all assessees (other than the eligible assessees as referred to in section 44AD and 44ADA) :
i) Up to 15% – On or just before June 15
ii) Up to 45% – On or just before September 15
iii) Up to 75% – On or just before December 15
iv) Up to one hundred% –On or just before March 15
b) In case of eligible assessee as referred to in section 44AD and 44ADA:
one hundred% – On or just before March 15
It could, even so, be noted that any tax paid on or just before March 31 will also be treated as advance tax paid for the duration of the similar monetary year, and the deposit of this tax is produced via challan ITNS 280 by ticking the relevant column, i.e., Advance Tax.
Penalty
If a taxpayer is liable to spend advance tax, but fails to spend the needed tax for the duration of the year or pays only a component of it, then he/she is liable to spend penal interest for default of advance tax.
Tax specialists say that the fourth and final installment of advance tax is needed to be deposited on or just before 15th March, 2021 for the monetary year 2020-21. The advance tax is to be paid @ one hundred% of the total estimated tax liability as lowered by the quantity of tax deducted at supply and advance tax currently paid. Failure to spend the advance tax would attract interest @ 1% p.m. In case of failure, the Income Tax Department can pass an order requiring assessee to spend advance tax and can also attach one’s bank account to recover the similar.