When preparing to file their tax returns, many people often get a shock as their chartered accountant tells them that they owe the government a considerable sum of money as interest for not having paid their “advance tax”. Many people have no idea that they are supposed to pay an advance tax. For this financial year, the first date for advance tax will be 15 June.
What is advance tax, you may be asking? The government collects taxes in order to pay for the expenses of carrying out the country’s day to day functions. These expenses are incurred throughout the year. As a result, these taxes need to be collected through the year and not merely at the end when we file our returns. In fact, this is the reason organizations deduct tax at source (TDS) on their employees’ salary income every month.
