What is Advance Tax?

Advance tax, also known as “pay-as-you-earn tax,” is the pre-payment of income tax by businesses in installments rather than paying a lump sum at the end of the financial year. This system ensures that businesses contribute to the government’s revenue throughout the year and prevents sudden financial burdens.

Who Needs to Pay Advance Tax?

• Businesses whose total tax liability exceeds ₹10,000 in a financial year.
• Self-employed professionals and freelancers meeting the taxable income threshold.
• Companies and LLPs with substantial annual earnings.
• Individuals earning income from rental properties, capital gains, or other business-related activities.

Advance Tax Payment Schedule

Advance tax must be paid in a structured manner according to deadlines set by the Income Tax Department:

• June 15 – 15% of the total tax liability.
• September 15 – 45% of the total tax liability.
• December 15 – 75% of the total tax liability.
• March 15 – 100% of the total tax liability.

Businesses that fail to pay these installments on time may face interest charges under Sections 234B and 234C of the Income Tax Act.

How to Calculate Advance Tax?

1. Estimate total income for the financial year from all sources.
2. Deduct eligible expenses, exemptions, and deductions (e.g., depreciation, tax-saving investments).
3. Calculate taxable income after deductions.
4. Apply the applicable income tax slab rates to determine the total tax payable.
5. Subtract TDS (Tax Deducted at Source) already paid, if applicable.
6. Pay the remaining tax amount in the prescribed installments.

Benefits of Paying Advance Tax

✅ Prevents Year-End Tax Burdens – Businesses avoid sudden large tax payments, ensuring better cash flow management.
✅ Reduces Interest and Penalties – Timely tax payments help businesses avoid penalties under tax laws.
✅ Ensures Compliance with Regulations – Proper tax payments prevent legal scrutiny and audits.
✅ Enhances Financial Planning – Regular tax payments help businesses allocate resources efficiently.

How ASK ASSOCIATES Helps:

ASK ASSOCIATES simplifies advance tax payments for businesses by offering:
✔ Accurate Tax Calculations – Our experts estimate your tax liability precisely to avoid overpayment or underpayment.
✔ Timely Reminders & Compliance Management – We ensure businesses meet deadlines, avoiding penalties.
✔ Customized Tax Planning – We help businesses optimize deductions and exemptions for maximum savings.
✔ Hassle-Free Online Filing – We manage all documentation and payment processes, ensuring seamless compliance.

By partnering with ASK ASSOCIATES, businesses can focus on growth while we handle their tax responsibilities efficiently.