Advance Tax Payment Deadline, Last Date to File Advance Income Tax Today: You need to pay the final instalment of this financial year's advance tax latest by March 15, 2021, or be prepared to face penalty.
Advance Tax Payment Deadline, Last Day to File Advance Income Tax Today: Are you yet to pay the 4th and final instalment of your advance tax to the Income Tax Department? If yes, then hurry up as you need to pay the final instalment of this financial year’s advance tax latest by March 15, 2021, or be prepared to face penalty.
The Income Tax Department has also said, “Your Advance Tax plays a pivotal role in shaping the development story of the nation. Let us, together, accelerate the nation building process. Do remember to pay the fourth instalment of your Advance Tax on or before 15th March, 2021.”
It may be noted that non/short payment of advance tax is liable to penal interest. Therefore, if you do not want to pay any penal interest or face any penalty as per the Income Tax Act, then you must pay the remaining advance tax today.
What is Advance Tax?
In addition to Tax Deducted at Source (TDS), advance tax is a mechanism through which the government collects income tax revenue from the concerned taxpayers on a regular (quarterly) basis. This mechanism is used particularly in case of those incomes which are not subject to TDS or where the rate of Tax Deducted at Source is less than the rate at which one’s income is taxed.
Who needs to pay Advance Tax?
Apart from businesses, even individuals – including salaried employees – whose tax liability is Rs 10,000 or more even after deducting TDS/TCS are liable to pay advance tax.
How is Advance Tax Calculated & Paid?
Advance Tax is calculated on the basis of a taxpayer’s expected tax liability of the year, and is paid in instalments as mentioned below:
(a) In case of all assessees (other than the eligible assessees as referred to in section 44AD and 44ADA) :
i) Up to 15% – On or before June 15
ii) Up to 45% – On or before September 15
iii) Up to 75% – On or before December 15
iv) Up to 100% –On or before March 15
b) In case of eligible assessee as referred to in section 44AD and 44ADA:
100% – On or before March 15
It may, however, be noted that any tax paid on or before March 31 will also be treated as advance tax paid during the same financial year, and the deposit of this tax is made through challan ITNS 280 by ticking the relevant column, i.e., Advance Tax.
If a taxpayer is liable to pay advance tax, but fails to pay the required tax during the year or pays only a part of it, then he/she is liable to pay penal interest for default of advance tax.
Tax experts say that the fourth and final installment of advance tax is required to be deposited on or before 15th March, 2021 for the financial year 2020-21. The advance tax is to be paid @ 100% of the total estimated tax liability as reduced by the amount of tax deducted at source and advance tax already paid. Failure to pay the advance tax would attract interest @ 1% p.m. In case of failure, the Income Tax Department can pass an order requiring assessee to pay advance tax and can also attach one’s bank account to recover the same.