Tax planning is not only about tax saving but it is also about planning of tax payments in time to avoid interest on late payment of tax and sudden cash outflow at the time of filing of income tax return. Tax Payment of any nature is always burden for a common man so it’s obvious that people will ignore and don’t want to pay tax in time. Payment of taxes at the time of return is helpful for those whose tax liability in the year is less than Rs. 10,000/- but it is mandatory to pay advance tax for those whose tax liability is more than Rs.10,000/- in a year.
Salary earner don’t bother about payment of advance tax as their Income tax is deducted from their salary from employer at the time of payment of salary. But if salaried employee has income which is not shown to employer e.g. Income from House Rent, Interest income from F.D, Capital Gain on Sale of asset then they might be end up paying interest on late payment of advance tax some time. So it’s very important for the salaried employee to estimate income and taxes on same for the whole financial year and to pay advance tax in time e if other incomes are not shown to employer. This will avoid interest burden. As per Income tax Act minimum instalment of advance tax and due dates is mentioned below.
|Due Date||Installment of advance Tax|
100% of tax should be paid on or before 31th March to avoid interest burden as per advance tax scheme of Income Tax. So payment of advance tax in instalments is always beneficial as tax payer don’t have to pay interest and direct burden of full tax payment can be avoided at the time of filling return.