Taxpayers will have to submit the third installment of advance tax latest by December 15 this year. According to the notifications, short payment or non-payment may lead to the income tax department levying penal interest.
Advance tax, also known as “Pay as you earn tax” is payable in installments within the due dates set by the IT department. As the name suggests, advance tax is paid in advance, instead of a taxpayer making a lump-sum payment at the end of the financial year.
Advance tax is liable on all tax payers including salaried individuals, freelance workers and businesses. All those whose tax liability is Rs 10,000 or more in a financial year, are liable to pay advance tax. Exemption is given in case of senior citizens aged 60 or above, who do not run a business.
Exemption from advance tax for FY 2017-18 is also given to those taxpayers opting for a presumptive scheme–where income from the business is assumed to be 8 per cent of turnover of less than Rs 2 crore. They are required to pay all their advance tax in one installment by March 15. However, the flexible deadline allows submission till March 31.
For both individuals and corporate taxpayers, the deadline for submitting the third installment of advance tax is December 15. In the first installment, taxpayers are liable to pay 15 per cent of advance tax and in subsequent three installments it increases to 45 per cent, 75 per cent and 100 per cent. The deadline is for FY 2017-18 and FY 2016.
Taxpayers that opt for presumptive taxation and earn business income from leasing, plying or hiring goods carriages also have the third installment deadline set for December 15.