Salary Around Rs 12 Lakh or Job Switch During the Year? Why You Should Consult a CA for Advance Tax
If you have switched jobs during the financial year or if your annual salary is around Rs 127,500, you may not have to pay TDS (Tax Deducted at Source).
For example, if your salary is Rs 1,275,000, you can claim a standard deduction of Rs 75,000 under the new tax regime. This reduces your taxable income to Rs 1,200,000. Which fall within the non-taxable range.
However, apart from salary, if you have other taxable income, such as interest from bank deposits, rental income, or any other income, it should also be considered while calculating your total tax liability.
In such cases, you must consult a chartered accountant (CA) who can review your complete income details and determine whether you have any tax liability. If there is a tax liability after considering all sources of income, you should pay advance tax before March 15 to avoid interest and penalties under income tax rules.
What do you understand by “advance tax”?
Advance tax is the process of paying your income tax liability in instalments throughout the financial year. Under this, you have to pay tax liability in four instalments instead of a single lump sum at the end of the year.
Who should pay advance tax?
You are liable to pay advance tax if your total tax liability is Rs 10,000 or more in a financial year. It includes:
- Salaried employees
- Self-employed persons
- Consultants, doctors, lawyers, etc.
- Business owners
- People earning income from rent, capital gains, etc.
Penalties for missing the deadline
If you fail to pay advance tax on time, then you attract interest at 1% per month and 12% annually under the Income Tax Act. Apart from this, if you even make a delay for a day, it will attract a three-month interest charge.
Due Dates for Advance Tax Payments
The following are some other important deadlines for advance tax payments:
June 15: At least 15% of total tax liability.
September 15: At least 45% of the total tax liability.
December 15: At least 75% of total tax liability.
March 15: 100% of total tax liability (final instalment)
