Taxpayers only pay tax on last year’s earnings. If the tax is over 10,000 rupees, it must be paid within the Act’s deadline. The Act includes Advance Tax provisions to ensure income reaches the government quickly.
What is Tax Instalment Payment?
Tax instalment payment is payment made in advance to reduce your upcoming tax liability. If you are a sole proprietor and expect to owe more than $3,000 in taxes this year (in the form of income tax or HST), you must make anticipated tax payments each quarter.
Tax instalments are not taxes for the current year which can be paid in instalments, unless you arrange a payment plan with CRA.
Due dates
Whether you are obliged to pay income tax instalments or HST payments (or both), these installments have separate due dates.
HST
April 30th
July 31st
October 31st
January 31st
INCOME TAX
March 15th
June 15th
September 15th
December 15th
* Installments of HST are due one month following the end of each financial quarter. These dates are based on the assumption that you run your business as a sole proprietor and that your fiscal year ends on December 31.
Don’t worry if you missed your payment – You can avoid paying interest on late payments by either paying your next installment early or by paying more than the required amount for that installment. You will be able to earn “installment credit interest” if you do so.
Overpaid your installment – Good news! You are eligible for a refund! Or the option to have the excess payment applied to the installments for the next year!
Tax installment payments allow you to be ahead of your tax responsibilities so you don’t have to worry at year’s end. Get tax preparation outsourcing help from professionals here.
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