Individuals who have sources of income other than their salaries must pay tax in advance. This applies to other incomes such as rent, capital gains from stocks, fixed deposits, lottery prizes, etc. It is possible to pay it online or through specified banks.
Advance tax payment is also referred to as the ‘Pay as you Earn’ plan. If your tax limit exceeds Rs.10,000 in a fiscal year, you must pay the tax. The tax must be paid in the same year as the income is received.
What exactly is Advance Tax Payment?
Tax payment challans can be used to pay advance tax at bank branches authorized by the Income Tax Department. It is possible to deposit it in authorized banks such as ICICI Bank, HDFC Bank, Syndicate Bank, Allahabad Bank, State Bank of India, Reserve Bank of India, etc.
Another method of paying advance taxes is through the Income Tax Department’s online tax payment website or the National Securities Depository.
Who is responsible for paying Advance Tax?
- Your tax due should be a minimum of Rs.10,000.
- You should be either salaried or self-employed.
- Income is derived from capital gains on stock investments.
- Fixed-deposit interest is a type of interest that is earned.
- Winnings from a lottery game.
- Rent or money generated by a home.
How Do I Pay My Advance Taxes Online?
- Visit the official Government website at www.tin-nsdl.com.
- Select “Services” – epayment: Online Tax Payment
- Choose the appropriate challan to pay your income tax ( Advance tax)
- Fill up the form with the right information. You’ll need to provide the correct assessment year, address, phone number, email address, bank name, captcha code, and other pertinent information.
- When you’re finished entering your information, you’ll be forwarded to the bank’s Net Banking website. This page should be double-checked to ensure that the income to be paid is correct.
- You’ll be given payment information, including your challan number.
- It is critical to declare your payment once it has been made. You can add a new entry to the paid tax page.
Advance Tax Payment Rebate
If the Income Tax Department finds that you paid more tax than you should have, it will reimburse the difference at the end of the year.
Taxpayers can request a refund by completing and submitting Form 30. They must submit their claim within one year of the end of the assessment year.
Exemption from Making Advance Tax Payments
- Senior citizens aged above 60 years are excused from paying the advance tax.
- Salaried people under the TDS net are exempt from paying the advance tax. Any earnings from sources such as rent, interest, capital gains, and other non-salary incomes will be subjected to advance tax.
- If the TDS deducted exceeds the tax payable for the year, the advance tax is not required.
The Advantages of Paying Advance Tax
- Taxpayers’ stress is reduced when they pay their taxes in advance. Taxpayers do not have to worry about running out of money or making last-minute tax payments when they pay their taxes in advance.
- It expedites the collecting of taxes.
- It raises government funds since the government can receive interest on the money collected.
- People who pay their taxes in advance keep away from falling behind on their obligations.
- It assists organizations in effectively managing their finances and offers an estimate of the income earned during the fiscal year. Get information on what is Challan 280.