The Central Board of Direct Taxes ( CBDT ) has recently issued an advisory asking the taxpayers to remit the fourth and last installment of advance tax on or before March 15th, 2018.
Advance tax means payment of income tax in advance instead of lump sum payment at year end. It is also known as pay as you earn tax. These payments have to be made in installments as per due dates provided by the CBDT.
The taxpayers who are bound to pay advance tax shall pay 75 percent of the due amount on before 15th December 2018. Before 15th March 2019, 100 percent of the amount shall be remitted to the Government.
Under the Income Tax Act, the following taxpayers are liable to pay advance tax. Any assessee, including salaried employee, whose tax liability for the financial year as reduced by the tax deducted/ collected at source is Rs. 10,000/- or more. Resident Senior Citizen (individual who is of the age of 60 years or more) not having income from the business/ profession is not liable to pay.
The assessee in respect of eligible business referred to in section 44D is liable to pay the whole amount of such advance tax on or before 15th March of the respective financial year. The Board mandates on-line payment of advance tax for all Corporates and also those assessees whose accounts are required to be audited under section 44AB of the income tax Act, 1961. Though e-payment is not mandatory for other taxpayers, it would be convenient for them since it ensures correct credit. “It should be noted that short or non-payment or deferment of payment of advance tax would lead to levy of interest,” the Board said.