Advance tax payment refers to the periodic tax payments made by individuals or businesses to the government based on their expected income for the current financial year. This system ensures that taxpayers pay their taxes in installments throughout the year, rather than in one lump sum at the end. Advance tax payments are usually required by taxpayers whose tax liability exceeds a certain threshold set by tax authorities. Failure to pay advance tax on time may result in penalties or interest charges. It's an important aspect of tax compliance and financial planning for individuals and businesses alike.
Instead of paying taxes in one lump sum at the end of the financial year, taxpayers are required to make installment payments throughout the year based on estimated income. These installments are typically due quarterly or periodically as determined by tax regulations.