Taxation and filing of taxes for your Small Business can be confusing and you may have heard of and wondered if your startup needed to pay advance tax.
In this post, we will examine:
• What is Advance Tax?
• Who is Eligible to Pay ?
• Why to Pay ?
• How to File Advance Tax
What is Advance Tax?
As the name suggests, Advance Tax is tax paid by an individual of the company in advance. Under the Pay as You Earn Scheme, you as the taxpayer will have to estimate your expected income and pay tax accordingly. Advance Tax is paid in the same financial year as the income earned.
Who is eligible to pay?
Individuals whose tax amount is more than 10,000 INR a year are liable to file tax. There are 4 dates that are important for those paying tax, and the percentage of taxes are recommended as follows:
• 15th June: 15% of Tax
• 15th September: 30% of Tax
• 15th December: 30% of Tax
• 15th March: 25% of Tax Failures to follow this deadline and dates can lead to penalties from the Tax Department.
Why to Pay ?
The payment of Advance Tax was put forth by the government to streamline and speed up the tax process. With the Advance Tax system, you will be able to pay as you earn and avoid the issues of shortage of time or funds by the final tax date.
How to File ?
Advance Tax can be paid either by filling out the following Tax Challan CHALLAN NO./ITNS 280 and depositing it at designated bank branches recognized by the Income Tax Department or you can file it online by filling up this form on the Indian Online Tax Website.