Who is liable to pay advance tax?

The advance tax liability

is applicable to individuals, salaried employees, freelancers, and businesses. It is mandatory if the total tax liability is Rs. 10,000 or more in a financial year. Here are some categories of individuals and entities that are liable to pay advance tax:

1. Individuals:

   if the total tax liability after deducting TDS (Tax Deducted at Source) is Rs. 10,000 or more, individuals are required to pay advance tax.

2. Businesses and Professionals:

   It includes self-employed individuals, freelancers, and businesses. If their tax liability exceeds Rs. 10,000, they are liable to pay advance tax.

3. Corporate Taxpayers:

   Companies, both public and private, are required to pay advance tax based on their estimated annual income.

4. Presumptive Income Taxpayers

   : Individuals who opt for the presumptive taxation scheme under sections 44AD and 44ADA of the Income Tax Act are also liable to pay advance tax.

The due dates for paying advance tax is in four installments throughout the financial year. If you fail to pay advance tax, it attracts interest under section 234B and 234C of the Income Tax Act.

This is a clear explanation of advance tax liability

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We are all familiar with income tax, including what it is, how it is calculated, how to pay, and other details. Some of us, though, might also be required to pay advance tax. For instance, you might have to pay advance tax if you sell a piece of property or make capital gains through stock trading. Four times a year, according to a set schedule, you must pay advance tax in installments. But do not fret. With the help of your internet banking account, you may quickly pay Advance Tax. Find out who is liable to pay advance tax here.

Who should pay advance tax?

Before I tell you who should pay advance tax, let me tell you what is advance tax. Advance Tax is the tax that an assessee must pay during the financial year in installments (rather than all at once). It is sometimes referred to as the "pay as you earn" taxation system.

Who has to pay advance tax?

Under Section 207, every taxpayer who has an estimated tax liability, or the amount of tax due, for the Assessment Year (AY), of Rs 10,000 or more is required to pay advance tax. This includes salaried individuals, independent contractors, professionals like doctors, lawyers, chartered accountants, architects, etc.

Employers with salaried employees deduct tax at source for "Income from Salary." Therefore, the Advance Tax would only be due if you received any other income except salary that was not disclosed to your employer. This could include dividends, interest, capital gains, rental income from real estate, and more.

Even an NRI (Non-Resident Indian) who earns revenue in India yet owes more than Rs 10,000 in taxes.

Who does not have to pay Advance Tax?

A resident senior person who does not earn any income from their business or profession and who is at least 60 years old during the relevant financial year is not required to pay advance tax.

Now you know who is liable to pay advance tax.

I pay advance tax every year. Because income tax should be paid in advance rather than in one lump sum at the end of the year. Pay-as-you-earn tax is another name for it. These payments must be made in instalments according to the income tax department's due dates. If you get income from sources other than your salary are subject to advance tax. Rent, capital gains from stocks, fixed deposits, lottery winnings, and other types of income are all covered. It can be paid using a credit card or a bank account. I will explain who is liable to pay advance tax.

Tour on who is liable to pay advance tax in India:

You must pay advance tax if your total tax liability in a financial year is Rs 10,000 or higher. All taxpayers, employees, freelancers, and enterprises, are subject to advance tax. Senior persons aged 60 and up who do not own or operate a business are free from paying advance tax.

If you have chosen the presumptive taxation method under section 44AD, then you must pay your advance tax in full on or before March 15th. You also have the option of paying all of your tax liabilities by March 31.

Independent professionals, such as doctors, lawyers, and architects, are covered by Section 44ADA's presumption framework. If you are one of them, then you must pay the entire amount of your advance tax liability in one payment by March 15th. You can also make full payment by March 31.

Guide on who is responsible for paying Advance Tax:

• Your tax due should be at least Rs.10,000.

• You should either be employed or self-employed.

• Gains on stock investments are your source of income.

• If you have earned fixed deposit interest.

• If you have won any kind of lottery.

• If you have generated rent from a residential property.

Guide to paying advance tax online:

1) Visit www.tin-nsdl.com, the official government website.

2) Select "Services", e payment and then pay taxes online.

3) If you want to pay your income tax, choose the appropriate challan ( Advance tax)

4) Complete the form with the right information. You'll need to fill in information like the correct assessment year, address, phone number, email address, bank name, captcha code, and other pertinent information.

5) You'll be forwarded to the bank's Net Banking website once you've completed the form. This page should be double-checked for unpaid income.

6) Following that, you'll receive payment details, including your challan number.

7) It's critical that you declare your payment once you've made it. You can do so by creating a new entry on the paid tax page.

You might have understood who is liable to pay advance tax.