Provisional tax is an important tax practice for individuals earning commercial profits under real terms, freelancers, and corporate taxpayers. It allows for the periodic payment of income tax and corporate tax declarations based on quarterly earnings.
Why Provisional Tax?
Also known as "advance tax," provisional tax aims to collect taxes upfront on quarterly earnings without waiting for the completion of the annual profit and loss account. This system ensures a more regular and predictable tax liability for taxpayers.
How is it Calculated?
The provisional tax amount is calculated based on the gross earnings of each period, using current tax rates. It helps regulate the tax declaration process for taxpayers, fostering a stable relationship between taxpayers and tax authorities.
Provisional tax serves as a crucial tool for financial discipline in businesses, facilitating regular and timely tax payments and easing financial planning.
04.07.2024