Pay first instalment of advance tax now
Every individual tax assessee whose estimated tax liability for a financial year (FY) exceeds ₹10,000 may need to pay advance tax. The deadline to deposit the first out of total four instalments of advance tax for financial year (FY) 2019-20 is on 15 June. So if you need to pay advance tax, do so before the deadline, as failure to comply can attract interest on the due amount.
Advance tax liability
According to Section 208 of the Income-tax Act, 1961, every individual tax assessee whose estimated tax liability for an FY exceeds ₹10,000 has to pay advance tax. However, if you are a salaried individual, and your employer deducts the necessary tax applicable to you and deposits it with the I-T department every month, and have no other source of income, you don’t need to worry about advance tax. If you have income from other sources such as interest from a bank deposit or capital gains from assets such as shares, mutual funds or real estate, you will need to pay advance tax.
According to Finance Bill 2016-17, an individual assessee has to pay advance tax in four instalments, instead of three earlier. The first is due on 15 June each year, by when you have to deposit 15% of the tax liability. By 15 September, you should have paid 45%, by 15 December 75% of the tax and by 15 March all of it.
However, those who file their income under the Presumptive Taxation Scheme (PTS) need to pay the entire advance tax in a single instalment on or before 15 March. Under PTS, a businessman or a professional can choose to file their returns based on an assumed income.
How to pay it
List out your income earned till date, actual tax deducted and your tax liability. You can use the calculator available on the I-T department’s website to evaluate and assess your advance tax liability. Once you have the idea of amount you have to pay as advance tax, you can pay it online as well as offline. Remember that you are just required to pay the advance tax, and there’s no need to submit any document or estimation.
Not all assessees need to comply with advance tax rules. A resident senior citizen (60 years or above) not having any income from business or profession is not liable to pay advance tax, as per Section 207 of the Act. So if a senior citizen is earning rental income, receiving pension, earning interest from bank deposits, and dividends, she won’t need to pay advance tax, as these incomes do not fall under the head “income from business or profession". Such exemption is irrespective of the amount of income that a senior citizen is earning from a source other than business or profession.
Source : Live Mint