What are Advance Tax and Self Assessment Tax?
Advance tax refers to paying a portion of yearly tax liability in advance. If liability for the year exceeds Rs. 10000 then the assessee has to pay advance tax on or before the due dates as specified.
It’s also known as ‘pay as you earn’ scheme, where assessee pay in the year in which the income is received or earned. If you do not pay it based on the percentage as specified in installments, then you will be charged 1% every month for the amount outstanding for the period.
Self Assessment Tax is what the assessee pays after the end of the financial year. Before filing the income tax return, every assessee is required to calculate the tax liability. If there are any outstanding tax dues to be paid then it is to be paid first before filing Income Tax Return. This tax is called the Self Assessment Tax.