Advance Tax - What is it?

Advance tax is the tax that needs to be paid in advance instead of paying it in a lump sum at the year-end. This tax is also known as pay as you earn. The payment of advance income tax is done in instalments according to the due dates defined by the income tax department.

Who Is Required To Pay Advance Income Tax?

• Salaried, Freelancers and Businesses Advance tax is applicable to all taxpayers, salaried, freelancers, and businesses if the tax liability is Rs 10,000 or more in a financial year. A senior citizen who is older than 60 years and not running a business is exempt from paying advance tax.
• Presumptive Income for Businesses Those taxpayers who have opted for presumptive taxation scheme under section 44 AD of the Income Tax Act, must pay advance tax in a single instalment on or before 15th March. They can also pay their income tax dues by 31st March.
• Presumptive Income for Professionals Independent professionals like lawyers, doctors, etc. who have opted for presumptive taxation scheme under section 44 ADA of the Income Tax Act must pay advance tax in a single instalment on or before 15th March. They can also pay their income tax dues by 31st March.

Let us now learn about the due dates for paying advance tax.

Due Dates For Paying Advance Tax

Individuals and corporate taxpayers must file their advance tax for FY 2019-20 & FY 2018-19 as per the due dates mentioned below.

The due date for taxpayers opting for Presumptive Taxation Scheme under section 44AD and 44ADA is as follows;