Taxpayers are required to pay advance tax on their income which they expect to earn during the current year. For example, for the financial year 2022-23/the assessment year, 2023-24 advance tax is payable in instalments during 2022-23 itself. All the persons whether the individual, firm, company or cooperative society will pay income tax in advance i.e. called advance tax. The tax is liable to pay in advance if the tax payable for the financial year is Rs.10,000 or more. A senior citizen (i.e. who is 60 years of age or more) doesn’t need to pay advance tax if not have any income from business/profession.
Who is Liable to Pay Advance Tax?
The following persons are liable/responsible to pay the advance date before its due date.
- All persons, including individuals, salaried persons whose tax during the financial year is more than Rs.10,000/- are liable to pay advance tax before due dates.
- Normally, in the case of salaried people, TDS has to be deducted by the employer on the salary earned during the financial year. However, if the employer goes wrong to do so or deducts less TDS, then salaried persons are also required to pay advance tax. However, if the income tax is less than Rs.10,000 after TDS subsequently no advance tax payment is required.
- Other persons that received an order u/s 210(3) are also required to pay advance tax as mentioned in that order. The instalments will furthermore be specified in the order. That person has also the option to pay higher advance tax if the estimated income is higher than the order. However, if the estimated income is lesser than the income specified in the order, then he must give the reply in form 28-A to deposit advance tax next instalment on a lower income.
Who is Not Liable to Pay Advance Tax?
- Senior citizens (over 60 years during the previous year) not having any income from business or profession shall not be liable to pay any advance tax.
Hope you liked our article; we will cover other topics of advance in our next articles like how to deposit advance tax, penal interest on short payment of advance tax and examples related to it. We have covered all the questions related to the topic, i.e. persons that are required to advance tax. However, we know tax is only a topic that is very difficult to grasp for laymen because of amendments in the income tax act every year.
However, don’t worry you can ask your queries related to the topic “Who is required to pay advance Tax.” We will surely reply to your queries in the next 24 to 48 hours. We also request to the tax profession that, please share your suggestion, experience sections, examples, how-to, guidance, and practical experience related to the topic here.