Advance Tax is the "pay-as-you-earn" system under the Income Tax Act. Instead of paying your total tax at the end of the year, you pay it in installments throughout the financial year.
Who Should Pay Advance Tax?
1️⃣ Individuals, salaried employees, freelancers, and businesses.
2️⃣ If your total tax liability exceeds ₹10,000 in a financial year (after TDS deductions).
How to Determine Your Eligibility
✔️ Salaried Employees: If you have additional income (rent, interest, capital gains).
✔️ Business Owners & Freelancers: Based on estimated income for the year.
✔️ Senior Citizens (above 60 years): Exempt if they don’t have business income.
Why Advance Tax is Important
✔️ Avoids heavy tax payments at year-end.
✔️ Prevents penalties and interest under Sections 234B & 234C for late payments.
✔️ Helps the government with timely revenue collection.
Estimate your income carefully, track your tax liability quarterly, and pay advance tax installments on time!
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