Advance Income Tax FY2020-21 – Must know about tax
Table of Contents
What is Advance Income Tax FY2020-21?
Advance Income Tax is income tax paid in advance during the financial year on a proportionate basis as per prescribed rules. Advance Income Tax FY2020-21
For example for the financial year 2020-21, the advance tax should be paid from April 2020 to March 2021. It means tax should be paid within the year in which income is earned. Hence, it is also called ‘pay tax as you earn’.
The amount that should be paid up to 31st March of the financial year will be considered as advance tax.
The Due Date for payment of advance income tax – Individuals, HUF, Firms, LLP, AOP/BOI, including Corporate Assessee like Companies
The due date for payment of advance tax by Individuals, HUF, Firms, LLP, AOP/BOI, Companies assessee is as follows:
| Due date | % of tax payable |
|---|---|
| On or before 15th June due date of the previous year | Up to 15% of advance tax |
| On or before 15th September due date of the previous year | Up to 45% of advance tax |
| On or before 15th December due date of the previous year | Up to 75% of advance tax |
| On or before 15th March due date of the previous year | Up to 100% of advance tax |
The due date of payment up to 15% of the tax payable by 15th June, up to 45% of the tax payable by 15th September, up to 75% of the tax payable by 15th December, up to 100% of the tax payable by 15th March of the financial year in which income is earned.
Due date for payment of advance income tax under Presumptive Taxation Scheme u/s 44AD / 44ADA?
The due date for payment of advance tax under Presumptive Taxation Scheme u/s 44AD / 44ADA is as follows:
| Due date | % of tax payable |
| On or before 15th March due date of the previous year | Up to 100% of advance tax |
How to deposit Advance income tax FY2020-21?
Details steps to deposit advance tax, click ‘CHALLAN_ITNS_280’
‘CHALLAN NO./ITNS 280’ is an income tax challan for depositing income tax relating to advance income tax, self-assessment income tax, tax on regular assessment, Surtax, Tax on Distributed Profit, and Tax on Distributed Income.
Who should pay advance tax?
Assessee liable for advance tax includes
· Salaried Individuals
Assessee having income from salary from an employer
· Professional / Freelancers
Professional / Freelancers has profit/gain from Business & Profession
· Business
Tax payable by Corporate and non-corporate assessee having profit/gain from the business.
· Assessee having Presumptive Taxation Scheme
A taxpayer having income assessed under presumptive basis whether carrying on business or profession.
Important questions relating to advance tax
When the liability to deposit advance income tax arise?
One should pay advance tax in case the amount of advance tax is more than Rs 10,000/- or more.
Which income is liable to advance income tax?
All income (Income from Salary, Income from House Property, Profit from Business/Profession, Capital Gain, and Income from other sources, winning from lotteries, crossword puzzle, etc.) are liable to pay advance tax.
What are the due dates for?
A resident senior citizen having age of 60 years of more and not having an income from business / profession, is not liable to pay advance tax.
What are the exemptions liable for advance tax?
A resident senior citizen having an age of 60 years or more and not having any income from business/profession, is not liable to pay advance tax.
Is NRI liable to pay advance tax?
Yes, NRI is liable to deposit advance tax if the tax payable is in excess of Rs 10,000/- on income accrue and deemed to accrue or arise in India.
What is the consequence of non-deposit of advance tax?
Non-deposit of advance tax as per prescribed time and a threshold amount of advance tax will result in a levy of interest penalty.
What happens if we miss the last deadline of 15th March of the financial year / previous year?
The assessee has still the option to deposit advance tax before 31st March of the financial year to be considered as advance tax. But interest would be levied due to non-deposit of advance tax either 15%, 45%, 75%, or 100% of tax payable in their respective quarter.
Which is the correct challan for a deposit of advance tax?
The assessee should deposit advance tax through Challan No 280. Advance Income Tax FY2020-21.
Details steps for payment of advance tax can be accessed by clicking > ‘CHALLAN_ITNS_280’.
