Due Date for payment of third instalment of advance tax is 15th December, 2020

This is to bring to your kind attention that the due date for payment of third instalment of advance tax (75%) for the financial year 2020-21 is 15.12.2020. Kindly take necessary actions to make the payment within the due date.

Applicability:

• Advance tax applies to all taxpayers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not have income from business/ profession are exempt from paying advance tax. If your total tax liability (after deducting TDS and other prepaid taxes) is Rs.10,000 or more in a financial year you are liable to pay advance tax.
• For taxpayers opting for Presumptive Taxation Scheme under section 44AD & 44ADA, 100% advance tax need to be paid before 15th March (4th quarter) and hence no requirement of making payment in instalments.

 

Important Points:

• It is to be noted that though Government of India has announced series of relief measures due to COVID- 19 pandemic, there is no change in timeline for payment of tax in FY 2020-21.
• It is also pertinent to note that the reduced rate of TDS (25% reduction in 23 non-salaried payments) announced in Press conference on 13th May 2020 and applicable till the end of this financial year, will have a direct impact on the advance tax liability for this year.
• Further, for corporates the rates were slashed to 22% for domestic companies and 15% for new domestic manufacturing companies with certain restrictions and conditions, kindly consider the same for the above advance tax computation as applicable to your entity. In this regard, please note that the surcharge applicable for these optional tax rates will be 10% irrespective of the income level and tax under section 115JB (MAT provisions) will not be applicable.
• For Individuals& HUF, a new optional concessional tax rate under section 115BAC has been introduced from FY 2020-21 onwards in Budget, 2020 upon satisfying some conditions and foregoing certain deductions eligible under the Act. Kindly consider the reduced rates for calculation of advance tax liability, if wish to opt for the same.