The benefits of Advance tax, also known as "pay-as-you-earn" tax, is a system of paying taxes in installments rather than in a lump sum at the end of the financial year. In India, advance tax applies to individuals, companies, and firms. Advance tax helps you in better cash flow management for both individuals and businesses by spreading the tax liability over the year rather than facing a large tax outflow at once at the end of the financial year.
Here are some other
advance tax benefits:
By paying taxes in advance installments as per the schedule set by the Income Tax Department, taxpayers can avoid interest penalties that may be imposed for late payment or underpayment of taxes.
Taxpayers to plan their finances and income streams better throughout the year.
Paying tax in advance helps in avoiding the last-minute rush and potential errors in tax calculation and payment.
It serves as a measure to prevent tax evasion, as taxpayers are required to estimate their income and pay taxes accordingly in advance. This promotes transparency and compliance in the taxation system.
Advance tax payments provide the government with a steady stream of revenue throughout the year, enabling better forecasting and planning of government expenditures and projects.
For businesses, advance tax payments serve as an indicator of their financial health and performance.
It encourages better financial planning and budgeting to meet tax obligations.
By paying taxes periodically throughout the year based on income estimates, taxpayers can prevent the sudden burden of a large tax payment at the end of the financial year, thereby easing their financial strain.
These are the
advance tax payment benefits.
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Authors Of The Question
What are the Benefits of Advance Tax?
Mahima
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1 Answers
9 months
2024-03-05T11:57:11+00:00 2024-03-05T12:02:01+00:00Comment
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