An individual must pay advance tax if they get money from sources other than their salary. This is true for things like rent, share capital gains, fixed deposits, lottery prizes, etc. You may pay for it online or using selected banks.
Advance tax is sometimes called the “Pay as you earn” program. If your tax burden exceeds Rs. 10,000 in a fiscal year, the tax is due.
Proposal for Easier Payment of Advance Tax on Dividend Income in the Union Budget for 2021
Making the computation and payment of advance tax on dividend income simpler for taxpayers is one of the proposals in the Union Budget 2021, which was unveiled by finance minister Nirmala Sitharaman on February 1st, 2021.
This will assist them in avoiding interest payments on advance taxes on dividend income, which they previously had to make due to difficulties determining the accurate dividend income. The plan aims to put capital gain tax compliance and dividend tax compliance on par.
Only once the taxpayer realizes the gains in their possession must they pay capital gains tax. This modification will take effect on 1 April 2021.
What is a tax payment in advance?
Another option for paying taxes in advance is through the National Securities Depository’s or the Income Tax department’s online tax payment portal.
Who must pay the advance tax?
You must meet the following requirements in order to pay tax:
Your tax obligation must be at least Rs. 10,000.
You ought to be an employee or self-employed person.
income derived from stock capital gains.
Earned interest on fixed deposits.
the proceeds from a lottery.
money derived from a home’s property, such as rent.
Payment in Installments for Advance Taxes Date of Due Date for FY 2020–21
The last instalment of advance tax payments must be made by March 15th, 2021, for the fiscal year 2020–21. Taxpayers are required to pay the full amount of their owed tax by this date.
How to Pay Taxes in Advance Online?
Visit www.tin-nsdl.com, the official government website.
Select “Services” and then “ePayment”: Tax Payment Online
To pay your income tax, choose the appropriate challan ( Advance tax)
Fill out the form with the right information.
How is an advance tax payment calculated?
By using the techniques and advice provided below, you may quickly determine how much tax you must pay:
Determine your estimated income for the fiscal year for which you are calculating advance taxes in step 1.
any interest from savings accounts, FDs, or other investments.
monetary gains
professional earnings
Rental revenue
Additional income
Step 2: To calculate your gross taxable income, add your payment to the amount above (while tax is not applicable on your salary, the sum total may change your tax slab which will change the tax liability further)
3: Determine the amount of tax due by using the most recent income tax bracket that applies to you.
You must pay tax if your tax due after deducting TDS is greater than Rs. 10,000.
