Know the New Steps for Payment of Advance Tax:

Know the New Steps for Payment of Advance Tax As you know that the due date for payment of Advance Tax for 3rd Quarter for Financial Year 2022-23/ Assessment Year 2023-24 is 15th December 2022. This Article discusses Everything You Need to Know About Advance Tax along with the process of Payment of Advance Tax.

What is advance tax?

Advance tax, as the name implies, is the practice of paying taxes in advance rather than in one large payment after the fiscal year. These taxes, often known as the 'pay as you earn' program, are meant to be paid in the same year as the income is received. According to the Income Tax Act, if a taxpayer's tax liability is Rs. 10,000 or more in a fiscal year, he or she must pay advance tax.

Who needs to pay advance tax?

Those who earn money from sources other than their income are subject to advance tax. It applies to self-employed people, professionals, and business owners whose income surpasses a particular threshold. This comprises money earned from stocks, bonds, and fixed deposits, as well as rent or income from housing renters. Senior citizens over the age of 60 are free from paying advance tax.

How to calculate advance tax?

The procedures for calculating advance tax are outlined below:

• Estimate your total revenue from sources other than your wage.
• Subtract all expenses from your earnings, such as medical insurance payments, phone bills, travel expenses, and so on.
• Now, in addition to your pay, including any other sources of income. This includes FD interest, house rent, lottery winnings, and so on.
• If the amount of tax estimated exceeds Rs. 10,000, you will be required to pay advance tax.

What are the Due Dates for Payment of Advance Tax?

[caption id="attachment_184061" align="aligncenter" width="1280"] Due Dates for Payment of Advance Tax[/caption]

How to pay advance tax?

Through NSDL Website

Advance tax payments, like normal tax payments, are made by challan. Many banks accept advance tax payments in the form of challans. You can also pay your advance tax from the convenience of your own home. Here's a step-by-step approach to paying advance tax online without any problems:

• To pay advance tax online, go to NSDL Website, which is the government's official website.
• To pay your advance tax, select the appropriate challan (ITNS 280, ITNS 281, ITNS 282, or ITNS 284).
• Fill in your PAN card information as well as other relevant details like your address, phone number, e-mail address, bank name, and so on.
• You will be routed to the website's net-banking page once you have completed all of the requirements.
• You will now receive all of the information you require on your payment. Complete all payment data and successfully pay your advance tax online.

Banks Available on NSDL: Bank of Baroda, HDFC Bank, IDBI Bank, Jammu and Kashmir Bank, Punjab & Sindh Bank, State Bank of India, UCO Bank, Union Bank of India

Through the Income Tax Website

• Visit the Income Tax Website
• Enter your PAN and Validate it with your Mobile Number.
• Enter the Tax to be Paid.
• You will be routed to the website's net-banking page once you have completed all of the requirements.
• You will now receive all of the information you require on your payment. Complete all payment data and successfully pay your advance tax online.

Banks Available on Income Tax Portal: Axis Bank, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India Federal Bank, ICICI Bank, Indian Bank, Indian Overseas Bank, Karur Vysya Bank, Kotak Mahindra Bank, Punjab National Bank

What are the benefits of advance tax?

Here's a rundown of the advantages of paying your taxes in advance:

• It alleviates the stress of paying taxes at the last minute.
• It reduces the stress that a taxpayer may have while making a tax payment after the fiscal year.
• It prevents people from defaulting on their tax obligations.
• Because the government receives interest on the taxes collected, it aids in the raising of government revenue.

Advance Tax Late Payment and Interest

If your advance tax payment is less than 90% of your assessed tax, you will be charged a monthly interest rate of 1% under Section 234B of the Income Tax Act. The interest is calculated as 1% interest per month on the delinquent amount until the tax is paid up. If you don't pay by the second or third date, you'll be charged the same interest penalty. If you do not pay your advance tax installment on time, you will be charged a 1% interest rate under Section 234C of the Income Tax Act.

Exemption in Advance Tax Payments

• Senior citizens aged 60 and up are not required to pay the advance tax.
• Salaried people who are subject to TDS are exempt from paying the advance tax. Interest, capital gains, rent, and other non-salary income, on the other hand, will be subject to advance tax.
• If the TDS deducted exceeds the tax due for the year, there is no need to pay the advance tax.

Refund in Advance Tax Payment

If the Income Tax Department discovers that you have paid more tax than you should have, it will refund the difference at the end of the year. By completing and submitting Form 30, taxpayers can request a refund. They must file the claim within one year of the assessment year's end.